Manganese Bronze to call in administrators
- 22 October 2012
- From the section Business
Manganese Bronze, the maker of London's black cabs, is to call in administrators PricewaterhouseCoopers after failing to secure new funding.
The announcement follows the suspension of its shares earlier this month, after a fault with the vehicle's steering box led to over 400 of them being recalled.
Manganese Bronze, which is based in Coventry, had been trying to secure a loan from Chinese shareholder Geely.
The company has made losses for the past four years.
Manganese Bronze, which employs 300 people, earlier this month also stopped sales of its new TX4 model.
The problem affects the vehicles' power steering and arose in a new design for the box, sourced from an unnamed new supplier since February.
The company said it had not put anyone in danger but "in extreme cases, it could affect the ability to steer the steering wheel".
It said in a statement that "the board remains hopeful that the fundamental strengths of the company, the TX4 model and its global reputation will provide the platform for a successful business in the future".
The supplier of the part was a Chinese firm introduced by Geely.
Manganese and Geely signed a joint venture agreement in 2006 and own a factory in Shanghai that produces taxis for the international market.
The company was already in some financial difficulty before the latest problem emerged.
Sales have been in decline - the Coventry-based firm sold 1,502 taxis in the UK last year, compared with 1,653 in 2010, a fall of 9.1%.
In January, Manganese Bronze had to issue a profit warning, saying that it had made no profit in 2011 and could fall short of expectations this year.
The group blamed the weak UK economy, uncertainty over the global economic outlook and a delay in fulfilling an order for 1,000 taxis from Azerbaijan.
For the first six months of 2012, Manganese Bronze recorded an operating loss of £3.1m on revenues of £34.3m.
Then in August, it discovered an accounting error had caused it to understate past losses by a total £4.25m.
The company's shares were last quoted on the stock exchange at 10 pence each, down from 35p a year ago.
Much of the company's shares are closely held: Geely owns 20%, while another quarter is owned by UK asset manager Toscafund.
Peter Coulson, West Midlands's regional officer for the Unite union, said: "This is one of the last remaining car manufacturers in the Coventry area and it's an iconic vehicle.
"So it's absolutely paramount that the company is actually continued as a going concern and it's Unite the union's responsibility as well as company's responsibility to make sure that it goes on as a going concern."
He added the Manganese Bronze board met last week to try to resolve the situation but was unable to do so.