Binley electric van maker goes into administration...

Coventry electric van maker Modec has gone into administration making half its workforce redundant.



The Binley-based manufacturer has blamed severe cashflow problems and the tough economic climate.

All 53 workers were told the devastating news during a briefing in which staff say they were left empty and gobsmacked.

And now the administrators are desperate to find a new buyer for the business which just 12 months ago was labelled a national treasure.

Administrators at Zolfo Cooper say they were left with no alternative but to make 26 employees redundant with immediate effect.

Ryan Grant, partner administrator, said: Unfortunately, the business has experienced severe cash flow difficulties in recent times. This, combined with the tough economic climate, has led to the need for administration.

We regret that we were left with no choice but to make some employees redundant in order to protect the value of this business for potential buyers.

"We would like to take this opportunity to thank every staff member for their professionalism and dedication during what has been an intensely difficult period.

At present, we are examining all possible options for the future of the business. Modec is a market leader in its field and as such it represents an attractive purchase for the right buyer.

Modec, which was set up in 2004, is a design and manufacturing firm - based in Progress Way specialising in the production of all-electric commercial vehicles.

Just a year ago, the company became a global name after conquering the States and securing a multi-million grant from US President Obama as part of a landmark deal.

The venture would see the Class 2c-3 commercial vehicles being shipped to the States and used for urban-suburban pickup and deliveries and transform Modec into a major success story for the city.

But now the firm has become the latest victim of the downturn. Workers say they were left in the dark over the severe cashflow problems of their employer.

One member of staff, who worked for Modec for four years, claims they had no idea what was coming when they were dragged into a meeting at noon today.

He said: It was a complete shock. We were called into a meeting at 12pm and then 15 minutes later we were walking out of the building without a job.

The way they handled the situation was completely unprofessional. They must have known for some time about this, but they refused to give us even the smallest hint.

We have been left empty inside and just gobsmacked by the whole thing. Everyone in that room was told they had lost their jobs, it was horrible, absolutely horrible.

Administrators say the remaining 27 workers will continue as normal in their roles at the company.

Alan Durham, director of policy at the Coventry and Warwickshire Chamber of Commerce, said: This is very disappointing news.

"They have the right kind of product for the 21st Century economy and many had predicted a very bright future so this has come as something of a shock.

They have a large supply chain in the UK, much of which is here in Coventry and Warwickshire.

So we will have to monitor that effect on the local economy. We do hope a buyer can be found to take the company forward.

A RESCUE deal for Coventry based electric vehicle manufacturer Modec could be imminent after a rival firm confirmed it was in talks to salvage the company.

Barry Shrier, chief executive of Oxford based Liberty Electric Cars, said last night his firm was mounting a rescue bid.

Mr Shrier, chairing a Science Capital debate in Birmingham on the future of the motor industry, said it was vital that innovative firms such as Modec were encouraged.

“Modec is a perfect marriage between science and innovation and should be allowed to continue its work,” he said.

“We are mounting a rescue bid for the company and hopefully I will be able to say more soon, unfortunately for legal reasons I cannot say any more at the moment.”

He said that for the future of the electric vehicle industry Modec and other firms had to survive because they had an important role to play in the future of the motor industry.

“Modec’s work is significant – take for example its tie with US firm Navistar,” he added.

“Navistar is a $15bn vehicle manufacturer that had been trying for 10 years to sell its trucks to FedEx without success then as soon as Modec gets on board FedEx immediately takes out an order.

“It just shows that little connections can make all the difference and if the right product can be found at the right time then there is a market for it.”

It is thought a marriage between Liberty and Modec would be a good fit in the electric vehicle sector. Liberty works on innovative pure electric drivetrains for 4x4 vehicles. Its E-Range is based on the traditional Range Rover.

Modec went into administration earlier this month with the loss of around half of its 53-strong workforce. The remaining staff have been working normally.

TheBusinessDesk.com revealed last month how the market-leading firm was struggling with cash flow problems and liabilities of almost £29m.

Recovery specialist Zolfo Cooper was appointed administrator of the company.

Source http://www.thebusinessdesk.com/westmidlands/news/142236-modec-rescue-deal-imminent.html?news_section=19020 (Sign up required)

ATTEMPTS by administrators to sell troubled electric van maker Modec have failed, it was revealed today.

Zolfo Cooper said today 25 people would be made redundant as a consequence, in addition to the 26 redundancies announced when Coventry-based Modec went into administration last month, following funding problems.

The firm said in a statement: “Despite the best efforts of the administrators, they have been unable to find a suitable buyer for the business as a going concern. Therefore, the administrators have regrettably been left with no choice but to cease trading and announce the redundancy of the majority of the remaining employees. A small number of employees will stay on at the site in the short-term to assist with winding down operations.

“However, the administrators have been able to achieve a sale of the remaining assets of the company.”
Modec had been unable to restructure its finances and had been in talks with ultimate parent Navistar since the beginning of the year.

Ryan Grant, Partner, Zolfo Cooper, said: “Despite rigorously pursuing expressions of interest, we have been unable to find a suitable buyer for the business as a going concern. Regrettably, we have therefore been left with no choice but to cease trading and make the majority of the remaining employees redundant with immediate effect.

“We appreciate that this has been a very difficult time for all staff but we would like to take this opportunity to thank them for their continued professionalism and dedication to the business during this period.”

Source: http://www.thebusinessdesk.com/westmidlands/news/148815-breaking-news-modec-rescue-bid-fails.html?news_section=19020 Requires sign up/login

Have to admit I was skeptical from the beginning about any talk of a rescue takeover.