Committee
Economy and Fair Work Committee 26 June 2025
26 Jun 2025 · S6 · Economy and Fair Work Committee
Item of business
Alexander Dennis
Paul Davies
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I would then make a further point about how we bridge the gap in our order book that is coming in the summer, and our being able to build bodies in Scotland in quarter 3—that is, in the autumn—hence the conversation about how we do that, given that we have no work in the summer and no new work coming in. That was why we had the conversation about a potential furlough scheme, but we then said, “Okay, what do we do beyond that?”
The market dynamics have changed significantly, and without some runway or feeling that something will change in the future, our decision-making process on the consolidation of manufacturing will be premised on market size and potential market share, assuming that nothing else changes. That brings us back to the question whether the landscape will change and conversations about local content, social benefits and such things. It is not just a simple matter of saying that an order will stop the consultation process—the conversation is broader than that.
In the same item of business
The Convener
Lab
Our next item of business is an evidence-taking session with the management of bus manufacturer Alexander Dennis. On 11 June, Alexander Dennis announced a co...
Paul Davies (Alexander Dennis)
The Scotland site’s capacity is about 300 to 400 buses a year. The Government has asked us what it would take to postpone the consultation and stop the proce...
The Convener
Lab
What is the number?
Paul Davies
It is about 70 to 100 buses this year. From our perspective, though, there are wider issues. Obviously, there has been a conversation about a potential furlo...
The Convener
Lab
But the 2022 act covers the whole of the UK, including Scarborough. I am trying to specifically understand what you would require in the next few months to e...
Paul Davies
We do not have sufficient volume in our order book to sustain two manufacturing sites in the UK, which is why we are looking at consolidation activity.
The Convener
Lab
How many more would you need next year to be able to run both sites?
Paul Davies
In the region of 300 to 400.
The Convener
Lab
And roughly how many orders do you have for next year?
Paul Davies
Very few.
The Convener
Lab
Okay. If you were able to secure those orders—between 70 and 100 this year, say, and 300 next year—would you give an absolute guarantee that production would...
Paul Davies
I would then make a further point about how we bridge the gap in our order book that is coming in the summer, and our being able to build bodies in Scotland ...
The Convener
Lab
We will come to the very specific issues about the landscape in a second, but the fact is that those conversations will not result in a solution in the next ...
Paul Davies
There are wider implications for us. Over the past few years, we have spent a lot of money on retaining skills and capacity in Scotland—for example, we have ...
The Convener
Lab
You seem to be suggesting that, even if you got extra orders, you would consolidate anyway.
Paul Davies
Our message to the Government has been that a furlough scheme has to be considered as part of a bigger picture, given some of the other issues that we have b...
The Convener
Lab
A scheme would allow conversations to continue, because, even with the best will in the world, changes to some of those things might take a bit of time—they ...
Paul Davies
It is absolutely not a done deal—it is a consultation process. We are very grateful for the active engagement that we have had from both Governments and othe...
The Convener
Lab
I come back to the point that a lot of those changes are not going to happen in 45 days. Might a commitment to having those wider discussions about the longe...
Debbie McCreath (Alexander Dennis)
To add to Paul Davies’s point, I would say that our ask of the Government at this time has been about the short-term solution. We have split the solutions in...
The Convener
Lab
Okay. That is a wee bit clearer. However, you still require a minimum number of orders. Are you saying that an extra 70 for the rest of this year and 300 nex...
Debbie McCreath
Yes.
Michelle Thomson (Falkirk East) (SNP)
SNP
I have a couple of wee questions. First, it seems as if you are saying that, even if you reach the magical number of orders, you still have to get them sold,...
Paul Davies
Yes.
Michelle Thomson
SNP
Given the business’s numbers and the financial flows that it has seen over the past few years—and well before Covid—it appears that there was a trigger for t...
Paul Davies
Historically, UK market registrations were between 2,500 and 3,000 buses per annum. Before the move to low-emission vehicles only, the competitive landscape ...
Michelle Thomson
SNP
You have again articulated the position as it has progressed over a number of years. We can see that, but it looks as if the trigger has been the refinancing...
Paul Davies
No. Our proposal has been entirely led by me and the UK executive team, although it will go through the executive of NFI Group, which is our parent company, ...
Michelle Thomson
SNP
Okay. Thank you.
Jamie Halcro Johnston (Highlands and Islands) (Con)
Con
Good morning. Following on from those questions, am I right in saying that you mostly only produce buses to order?