Hope for 100s of Scots jobs hit by bus firm plan to go to England
They are looking at how far they 'can push' the UK 'state aid' rules set out in the Subsidy Control Act 2022 to create a support package to save the 400 jobs.
The second meeting of that working group was held on Monday last week and it is due to meet again this week.
An Alexander Dennis source said that they are engaging with both governments "in good faith on the possibility of any intervention" and stressed that a final decision on the move had not yet been made.
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The Scottish Government came under fire after the deputy first minister Kate Forbes pledged to leave "no stone unturned" in securing a future for ADL.
Kate Forbes (Image: Colin Mearns) Ministers have said there was "cause of hope in terms of looking at a way through the challenges".
A row erupted in the Scottish Parliament in the wake of revelations in the Herald over the depth of the public funding for Scottish jobs over the past ten years - and even while it was cutting back its workforce by a third five years ago.
The Herald also revealed how the First Minister was warned of Alexander Dennis concerns last summer a year before announcing plans last week to relocate to England putting 400 jobs at risk.
Alexander Dennis, which has factories in Falkirk and Larbert, said it was considering moving manufacturing to a site in Scarborough.
The plans would see work at the Falkirk site discontinued, while the Larbert site would be closed after current contracts are completed.
The company said it was facing strong competition from Chinese electric bus manufacturers whose share of the market had risen from 10% to 35%.
Alexander Dennis, which manufactures single and double decker buses, said the new proposed structure would lower costs and increase efficiency.
Calls have been made to claw public money back money if Alexander Dennis follows through with its plans.
The Herald revealed that the row between ministers and ADL emerged over levels of support and had its roots in Scottish Government schemes launched from 2020 to accelerate the use and manufacture of zero and low emission buses in Scotland and 'help drive a green recovery out of the Covid pandemic" which have been worth a total of £155.8m to date.
The SNP launched their financial case for Scottish independence at Alexander Dennis (Image: Newsquest) Frustrations emerged after May 2023 when Alexander Dennis hosted the second phase of the Scottish Government's Zero Emissions Bus Challenge Fund (ScotZEB) which was to have funding worth £58m. It also showcased its Enviro100EV concept, a lightweight single-deck zero-emission bus with new in-house battery powertrain confirmed that grant backing accelerated its development.
In a scathing letter seen by The Herald, Paul Soubry, president and chief executive of Alexander Dennis's parent company NFI, told John Swinney that recent developments had 'regretfully left [them] with the impression that the Scottish Government has little regard for domestic bus manufacturing jobs in Scotland'.
The First Minister was also told they had already been 'forced' to offshore certain manufacturing functions to China.
But a Scottish Government memo said that ADL had received orders for 363 zero-emission buses from ScotZEB more than any other manufacturer benefitting from the schemes. A separate briefing states that Alexander Dennis was awarded only 17% or 44 buses from second phase of the programme.
A significant grant through the ScotZeb 2 programme was awarded to Zenobe, and its consortium of bus and coach operators to support the transition of bus fleets to electric.
ADL, which incurred total losses over three years of £44.9m between 2021 and 2023, made its own bid to the programme but was unsuccessful. While ADL was a supplier to the successful consortium it was not a formal part of it.
An Alexander Dennis spokesman said: 'Our focus remains on ensuring our people are supported during our consultation process.
"This is a challenging time, and we are grateful for the active engagement from the Scottish and UK Governments and other political parties and stakeholders to discuss options and possible interventions.
"It is clear there is a shared ambition to ensure the Scottish and UK manufacturing industry is protected and can thrive and we hope that we can encourage a cross-nation, collaborative approach as we continue to progress these important discussions.'
The Scottish Government has said that policy interventions had been designed to "accelerate uptake of zero emission buses in the Scottish market".
According to Scottish ministers, ADL secured orders for more than 360 vehicles through Scottish Government funding programmes.
And they say the route to providing further support involves looking at ADL's cost base, considering what additional support can be provided to help with productivity and to lower costs and to look at how an order book can be developed for the company.
They to say that there is "cause for hope" and that there were "solutions" that can be delivered through the collaborative process.
While they say they have to abide by public procurement regulations and subsidy controls, but were working on a "support package" for the company.
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