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Bus company defies economic gloom

25 November 08 00:13 GMT

By Jo Perry
BBC Scotland news website, Tayside and Central reporter

Like much of modern day Scotland, Falkirk's prominence as a centre for heavy industry in the 19th Century, failed to insulate it from the decline of the manufacturing sector.

Today the biggest employers in the area are Falkirk Council, Asda, the giant petrochemical plant at Grangemouth - and Falkirk-based bus builder Alexander Dennis.

As one of the last remaining manufacturers in the area, Alexander Dennis is not only vital to the local economy, but has also grown to become the largest bus manufacturers in the UK.

It employs more than 1,000 workers at their headquarters in Camelon, building buses for use in places like London, Edinburgh, Hong Kong and North America.

Despite the economic gloom, it has seen its year-on-year turnover rise from £200m to £300m and has extended its manufacturing capacity by 50%.

At present the company has an order book in excess of £200m.

That success has been put down to a combination of factors - including the economic slowdown itself.

Rising fuel costs have seen the cost of running a car soar, leaving commuters more inclined to take a bus.

Strategies for cutting traffic build up in town and city centres have also increased the demand for buses.

'Commodity movements'

Government plans to reduce carbon emissions to combat climate change come as the firm launches a new generation of hybrid diesel-electric buses.

The firm's success has been hailed by Scottish First Minister Alex Salmond, who visited the Falkirk site last month. He described Alexander Dennis as the industry blueprint for innovation in the development of sustainable transport.

But despite its success, Bill Simpson, the company's corporate affairs director, said the firm was not insulated from the effects of the economic slowdown.

He said: "Nobody is immune from the recession. Rises in the cost of steel, aluminium and copper, which have gone up by huge amounts, have to have an impact on your business.

"As an exporter, foreign exchange movements have also had an impact. We're liable to the same commodity movements as anyone else.

"The high oil price has been a double-edged sword for us as the front and back of our buses are made from a petroleum-based product called GRP. So when the price rises, our costs go up.

"However, in a general economic decline there is evidence that passenger ridership does increase.

"We have to see adversity as opportunity."

Mr Simpson said political leaders could help ensure the future success of the business by encouraging bus operators to go green.

"Everybody's talking about the environment but what are you going to do - continue to talk or act?" he asked.

"We think there's a compelling argument for incentivising operators.

"If there was a serious commitment for this in the next five or 10 years, we believe we could reduce the carbon footprint of central Scotland by between 30% and 50%.

"Every bus in London will be a hybrid by 2012 and there's no reason we can't have the same in Scotland or elsewhere in the UK."

Despite his optimism, the economic realities of the slowdown stopped Mr Simpson from giving a cast iron guarantee about the future of the Falkirk site.

He said: "We are as robust as any business.

"The Falkirk site is a critical part of our business. As long as our volumes remain high and as long as our workforce adapt to the changing conditions, we'll survive and prosper."

BBC Scotland is focussing on the impact of the credit crunch on Falkirk, with special reports on television, radio and online on Tuesday.

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