The bus firm announced earlier this year that it could leave Scotland.
The Scottish Government has announced a £4 million furlough scheme aimed at keeping bus firm Alexander Dennis in Scotland.
The company said earlier this year it was consulting on the potential closure of its operations north of the border, putting up to 400 jobs at risk in the Falkirk area and consolidating at a site in Yorkshire.
The announcement means the firm can add a new potential outcome to its consultation, which could save the jobs at the site.
Ministers said they would “leave no stone unturned” in securing the future of the firm in Scotland and First Minister John Swinney has announced the funding ahead of a visit to the site on Monday.
The funding will be used to pay staff after the firm signs new orders and before work begins, with the Government funding 80% of wages and the remainder paid by Alexander Dennis.
“The Scottish Government wants to retain the manufacturing workforce of Alexander Dennis,” Mr Swinney said.
“My officials have discussed detailed terms with management and reached agreement on the principles of a company-run furlough scheme.
“To access the Scottish Government funding, the company will need to provide evidence of orders that will enable its manufacturing to continue in Scotland.
“Although the details are commercially sensitive, I am aware Alexander Dennis is working hard to do that.
“This is intended to act as a bridge to a sustainable future for the company in Scotland. During this period, training will also be offered by Scottish Enterprise.
“It is essential we protect the skilled manufacturing jobs we need to build our transition to a green industrial economy.”
Alexander Dennis president and managing director Paul Davies told a Holyrood committee earlier this year the firm would need to secure between 70 and 100 bus orders by the end of the year as well as between 300 and 400 next year to be viable.
Responding to the news, Mr Davies said the company was “deeply grateful”.
“This announcement marks a turning point. The Scottish Government’s support allows us to propose a new outcome to our statutory consultation,” he said.
“This has been made possible by collaboration, determination and a shared belief in the value and future of domestic manufacturing.”
