The statement came from Alexander Dennis Limited (ADL), the UK’s largest bus and coach manufacturer, which goes under the brands of Alexander Dennis and Plaxton.
It is not yet clear how many employees will be affected at Plaxton's Eastfield factory.
The statement from Alexander Dennis Limited said that "as a result of the significant decline in UK demand for new buses and coaches, it is forced to initiate a restructuring programme which places up to 650 jobs at risk.
Scarborough's Plaxton bus manufacturer to star on BBC's Inside The Factory – where London's double-decker buses are built
Yorkshire distillery celebrates World Whisky Masters awards
Yorkshire Coast BID announces commitment to sustainability
Yorkshire Building Society colleagues in Bridlington to host free money tips sessions for children at Morrisons
Flamingo Land: Take a ride on new £18m roller coaster inspired by Scarborough fashion company SikSilk
"With many UK customers not in a position to place orders for new vehicles following the impact of lockdown, social distancing and low passenger numbers, ADL has utilised the UK Government’s Job Retention Scheme as well as implementing salary reductions and reduced working hours for non-furloughed staff, along with stringent cost saving measures across all business functions.
"However, the steps taken so far are insufficient to align the company’s cost base to the current economic reality and it now seeks to move to a leaner, more flexible manufacturing model that maintains its strong customer focus and best-in-class aftermarket support.
"A formal consultation will begin in the coming weeks on the restructuring programme, which places up to 650 jobs at risk across all functions and at all of ADL’s facilities in the UK."
Plaxton has been at the forefront of the industry since 1907. Last year it produced over 200 coaches, each tailor-made to customer specifications.
Plaxton's primary markets are the UK and Ireland but in recent years it has expanded sales into Europe and further afield to New Zealand.
Alexander Dennis Limited is a subsidiary of NFI Group Inc., one of the world’s largest independent global bus manufacturers.
Colin Robertson, who is transitioning from his role as ADL’s Chief Executive to join NFI’s Board as Vice Chair, said: “A few short months ago, we were looking at a record year of sales, reaping the benefits of all our investment in new technology, new products and new markets. All of this changed with the impact of Covid-19.
“Since March, we have been in constant dialogue with the UK and Scottish Governments to make them aware of the unprecedented crisis facing our industry. We are deeply grateful for the support offered by the UK Government’s Job Retention Scheme, and we are heartened by the Prime Minister’s reiteration earlier this month of the pledge he made in February to bring 4,000 new green buses into service. We continue to call upon both Governments to act now to prevent further job cuts and preserve the UK’s world-leading bus and coach manufacturing industry.”
The changes at ADL are part of a wider restructuring programme announced by NFI, affecting ADL’s sister companies in the United States and Canada along with the consolidation of ADL’s spare parts business in North America into NFI Parts.