For many years, the black cab has been an iconic symbol of London. Despite the recession, business has been booming for taxi drivers in the capital this year – especially with thousands of foreign visitors pouring into the city for the Olympic and Paralympic Games, and the wet weather dampening shopper’s enthusiasm for walking home or to the nearest tube station.
Unfortunately, while cabbies may have been enjoying a relatively successful summer, the manufacturer of the black cabs has been enduring a cash crisis which forced it to call in administrators earlier this week.
Manufacturing firm Manganese Bronze has halted production at its Coventry plant, leaving the 300 employees based there with worries over their job security. The plant is now the only car manufacturer left in Coventry, according to Roger Maddison, national officer for the motoring industry at Unite.
He added; “If it becomes necessary the Government should step in to support the company and protect the highly skilled workforce.
“The London taxi is iconic and the staff who build them are highly skilled.
“The black cab is part of Britain’s car manufacturing heritage and we expect the company and the administrators to do everything possible to secure the future for this Coventry based company.”
The board of directors at Manganese Bronze made the decision to place the firm under the control of administrators after failing to acquire a much needed cash injection of £15 million from majority shareholders Geely, a Chinese manufacturing company. This cash was required after the firm sustained heavy losses over the past few years for a number of different reasons, leading to a mounting debt upon its shoulders.
Manganese Bronze has struggled since the start of the recession, yet much of the financial difficulty can be put down to serious accounting errors. In August, bosses admitted that £4 million had been “misplaced” due to computer malfunctions, creating a significant deficit in the company’s finances. This led to almost a third of the company’s value being wiped off.
Meanwhile, the recession has meant that taxi drivers are cautious about spending unnecessarily, as are much of the population. Sales dropped by 10 per cent in the past year alone as cabbies chose to make do with what they had, rather than fork out for a vehicle upgrade.
Competition from cheaper rivals has also seen much of Manganese Bronze’s customer base jump ship, as more and more manufacturing firms try to get their foot in the door of the taxi business.
However, it is arguably the recall of 500 black cabs by the company which has put the business in the dire straits it finds itself in now. A steering box fault was discovered after two separate drivers complained of steering issues, and while Manganese Bronze stress that no accidents or injuries were caused by the issue, the fault has had a “material and detrimental” impact on the cash flow of the business as a whole.
John Russell, chief executive of Manganese Bronze, acknowledged the stress the administration decision will be causing for the staff in Coventry, saying that it was a “tough time for everybody.” However, the company remains optimistic that the business will return to profitability after the debts had been cleared.
In a statement released by the company, it said; “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 London Taxi Company sector of the business has manufactured more than 100,000 vehicles since its launch in 1948, and currently puts out around 2,700 black cabs each year.
Do you think the Government has a certain responsibility towards iconic British businesses which find themselves struggling as a result of the recession, or do you think that Manganese Bronze are largely to blame as their finances were not properly kept in order? With the rest of the British car manufacturing industry going from strength to strength, why do you think Manganese Bronze is struggling to keep its head above water?
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