Alexander Dennis Limited (ADL) has begun the formal consultation on its previously announced restructuring programme, a move brought about by the significant fall in demand for new buses and coaches due to the coronavirus pandemic.
This fall in demand, a consequence of the national lockdown, social distancing measures and low passenger numbers, has left ADL with “no alternative but to adjust its business to the current economic situation,” it explained in a statement.
Since 27 July’s announcement of the restructuring programme – which has put up to 650 jobs at risk across all of the company’s UK facilities – ADL has continued its dialogue with the UK and Scottish Governments and other stakeholders. However, it says there remains no signs of additional stimulus funding (aimed at supporting operators to place orders) making it necessary to begin a formal consultation on the proposed restructure.
ADL says its restructuring programme is designed to ‘adjust current capacity without compromising the company’s ability to respond to a resurgence of demand in the future.’
Following experience of vertical integration at ADL’s facilities in North America and the Asia Pacific region, where building chassis and body on the same site has demonstrated efficiencies in terms of output, time, cost and co-ordination, ADL intends to transfer chassis production to its Falkirk factory. This will impact around 200 employees in manufacturing and operational support roles at Guildford.
Non-manufacturing functions including Engineering, Test & Development and Aftermarket will continue to be based at the Guildford site.
ADL President & Managing Director Paul Davies said: “The Dennis brand is of huge significance to the company, with its proud history and heritage of automotive innovation dating back to its inception in 1895. We will fight hard to protect this legacy and will continue to invest in our chassis product range, which will continue to be engineered in Guildford.”
The current lack of demand for new buses and coaches will also mean the potential loss of 90 production jobs in Scarborough and a net reduction of 160 manufacturing roles in Falkirk, even with chassis assembly transferred to that site.
As the company adjusts its overhead to the change in manufacturing activity, a further 200 roles will be affected in support functions across all UK sites. ADL is actively seeking voluntary redundancies to reduce the number of compulsory job losses.
Paul added: “We have no choice but to implement these tough decisions to protect the company’s future health. We remain confident that the situation will improve in time, and we are well placed to take advantage when that happens, but right now we have to adjust to our new economic reality.
“We continue to call upon the UK and Scottish Governments to urgently introduce meaningful support to facilitate demand for new buses and coaches, not only to prevent further damage to UK bus and coach manufacturing that could threaten additional production sites, but to help build back better with a green recovery that delivers cleaner air for our towns and cities. The installed UK fleet is currently approximately 50,000 buses and 21,000 coaches with an average age of nearly 11 years. Further, only 0.1% of the total fleet are electric, which provides opportunity for massive reduction of the environmental footprint.”