Coventry taxi builder LTI has gone bust...

[dutchman]

Manganese Bronze, the maker of London's black cabs, has called in administrators Grant Thornton after saying it is no longer a going concern.

The appointment follows the suspension of its shares earlier this month, after a fault with the vehicle's steering box led to 400 of them being recalled.

Manganese Bronze, which is based in Coventry, had been trying to source new funding, but negotiations failed.

The company has made losses for the past four years.

Manganese Bronze 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".

Chinese partner

The supplier was a Chinese firm introduced by Manganese's Chinese partner, 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.

[rebbonk]

I think we predicted this, though not quite the way it's happened. I just hope that as many jobs as possible are saved.

[dutchman]

Once again the workforce pay the price for a string of bad management decisions.

[dutchman]

London cabbie - it's the final nail in our coffin

A LONDON taxi driver claims LTI's administration is the final nail in the coffin for thousands of cabbies.

James Savage bought a TX-4 model from the Coventry firm one year ago for £33,000 with a three-year warranty.

But that could now be under threat after owners Manganese Bronze announced it had called in administrators.

The London cabbie told the Observer this afternoon (Monday): "We've been sold a dummy here.

"There have been ongoing problems but they've hidden that fact from drivers.

"This is the final nail in the coffin for us.

"If it goes bust then my warranty goes out of the window.

"That will mean any costs are down to me and these aren't the most efficient vehicles.

"This will affect several thousand cab drivers around the country."

Councillor Kevin Foster, the leader of Coventry Conservatives branded it a black day for the industry.

He said: "Whilst many know it as the “London” taxi here in Coventry we know that it is one of the symbols of our city.

"These vehicles go across the globe displaying a badge with the city’s coat of arms and declaring proudly that it was “Made in Coventry”.

"I hope that a package can be put together to keep this symbol of our city, along with the hundreds of jobs that go with it, alive.

"The City Council should look to form a task force with our key partners locally to explore all options and can count on our support in ensuring everything possible is done to ensure this news is not the final journey for hundreds of jobs."

The firm, believed to have made losses for the past four years, employs 300 people in Coventry.

Shares in the firm were suspended last week after 400 TX-4 models were recalled over a steering design fault.

[rebbonk]

I can sympathise with the driver in this article.

I had an MG when they went bust. Cost me a small fortune to sort out engine issues that would normally have been covered on warranty.

[dutchman]

Coventry black cab makers need 'big backer' to survive

CRISIS-HIT taxi maker LTI needs a ‘big backer’ if it is to survive, says a Coventry car industry expert.

According to Professor David Bailey, of Coventry University Business School, the long-term prospects for the historic firm are not promising – with the only hope resting on a wealthy buyer.

His comments come after administrators were appointed yesterday when attempts to secure a £15million rescue package from its Chinese joint venture partner Geely failed.

And with almost 300 jobs facing the axe, LTI owner Manganese Bronze are hoping a buyer can now be found to save the Coventry firm.

Prof Bailey said: "Short-term I am reasonably positive about the company – maybe Geely would be able to pick it up for a cheaper price. However, long-term I see a problem because the business model just doesn’t add up.

"Whether or not a viable business model can actually be carved out for Manganese under new ownership is now the key question. The tie-up with Geely is anyway critical for the firm and complicates ownership in the short-run by another party.

"Whether Geely will pick up the firm on the cheap out of administration is an interesting question. If it does, there is of course the risk of another lift-and-shift of what remains of assembly – think MG Rover and LDV – out to China, although some assembly in the UK may be useful for branding purposes.

"Ultimately, if it’s to survive, the brand needs a big backer able to take a mass produced platform and convert it to taxi."

But according to Midlands industrialist and supplier to the car industry, Russell Luckock, yesterday’s announcement may signal the end of the road for LTI.

"I do not see any future for the firm at all. The only person likely to buy them is Geely and they need to decide do they lose the 20 per cent stake in the company or risk putting more money in.

"It is dreadful, but I do not think there is any chance that the company can survive. When I heard that they had recalled 400 vehicles, I knew, without a shadow of a doubt that this was the last straw.

"It is incredibly expensive to take out 400 steering boxes and repair them, but this has to be done."

LTI’s roots can be traced back to 1919 when Carbodies Ltd was set up as a coach building operation in Old Church Road. It moved to premises in West Orchards Street before relocating in the mid-1920s to its current site in Holyhead Road.

In the late 1940s Carbodies started building taxis and the firm produced more than 7,000 taxis over the next decade, most of which were sold to the London market. In 1958 the FX4 taxi was launched, but Carbodies did not take over making the chassis from Austin – then called British Leyland – until 1971.

Carbodies was taken over by Manganese Bronze Holdings in 1973 and in 1982 became the complete manufacturer of the FX4.

London Taxis International was formed in 1984 and the name Carbodies was dropped in 1997 – the year production of the FX4 ended and was replaced by the TX1.

The company makes about 2,700 cabs a year and has produced more than 100,000 since it started in 1948. Its newest model, the TX4, was launched in October 2006.

But the company has been loss-making for four years and on October 12, the company was forced to recall 400 TX4 vehicles after a steering defect was found.

Prof Bailey added: "That recall had come hot on the heels of disappointing results, with losses widening last year to £4.7million after a major accounting cock-up linked to a new IT system, and a slump in orders for its iconic black cab in the key London market."

[dutchman]

London Taxi Company needs government help: Unite union



A union has called for the government to assist the black cab maker Manganese Bronze, which has called in administrators.

The Coventry-based firm, which trades as the London Taxi Company, had its shares suspended earlier this month after a fault with 400 of its vehicles.

The firm employs 288 staff, with 170 of them based at its factory in the city.

Union Unite said it would contact the government. The firm's boss remains "hopeful" of a successful resolution.

The company had been trying to secure a loan from Chinese shareholder Geely, a partner since 2006.

Unite national officer Roger Maddison said: "We hope Geely is ready to come up with some assistance but if not then the government's going to have to help.

"This is what the government's plan for saving the economy is.

"They're going to have to come up with some money and help and they're going to have to come up with it soon.

"They're shedding jobs in the public sector and expecting the private sector to pick up that work so when companies like London Taxis are in trouble they're going to have to help otherwise their whole business plan is going to fail."

The latest problem relates to a fault with the TX4 vehicle's steering box which the company said had not put anyone in danger - but "in extreme cases, it could affect the ability to steer the steering wheel".

'Fantastic reputation'

Chief executive of Manganese Bronze, John Russell, said he was uncertain what effect going into administration would have on jobs but he remained optimistic about the future.

Mr Russell said: "We're a business with a fantastic reputation, everyone calls us an icon and we had a huge amount of interest in what was happening to the company yesterday.

"I think that in turn will create a lot of interest and the administrators will have a lot of choices about what to do with the business."

He said the catalyst for the firm's problems was the credit crunch.

"Our business halved in the space of two years and we got into all sorts of difficulty in terms of the cost structure.

"When the recall was announced we suddenly went to a position where we couldn't sell cars. We had no money coming into the business," he said.

He said there had been efforts to protect the business: "Geely were very co-operative, very supportive but at the end of the day the business just couldn't take on the debt that was being contemplated.

"Geely are going to play a part in this process. They are our partner, they are a key supplier to the business, they were a historic investor and there is a big debt owed to Geely as a result of this."

Mr Russell said the key thing was for the steeling problem to be fixed so the business could start "generating revenue".

"That will give us a period of grace whilst the administrator looks for options for the business."