Thursday, 12 September 2013
Taxicabs roll again in Coventry
The production line at the London Taxi Company (LTC) in Coventry of the distinctive ‘black cab’ has begun to roll again following the ‘rescue’ from administration by Chinese company Geely Automobile Holdings Ltd.
The business plan calls for the company to sell 2,000 taxicabs in the first year, after winning contracts to Saudi Arabia and the United Arab Emirates.
Last month, it was reported that Geely Automobile Holdings Ltd, whose parent owns Volvo Cars, plans to export cars it has developed with the Swedish brand to the US beginning tear 2016 – a decade after founder Li Shufu set the goal.
Geely chairman Li Shufu and business secretary Vince Cable watched the first vehicles rolling through the UK factory in a ceremony reminiscent of one which journalists have seen performed many times before in various companies.
It is claimed that once up and running the line will be able to produce 10 vehicles a day. However, LTC’s main market, London has undergone many changes and the company has lost market share to rivals since it went into administration.
LTC has witnessed many events in its life. It was the only business of Manganese Bronze Holdings, a company founded in 1899 and one that for a time had various businesses under its umbrella. But in recent years its principal activity has been the design, development and production of London taxicabs.
In October 2006 Manganese Bronze and Chinese automaker Geely announced the creation of a China-based taxicab manufacturing joint venture. In January 2007, Manganese's shareholders approved the formation of the joint venture. In June 2008 Manganese announced the production of the first prototype TX4 taxi at its Chinese joint venture, LTI Shanghai.
Only a month later, in July 2008, Manganese Bronze announced it would be making 40 employees redundant as a result of the global economic downturn.
But with a year, Geely Automotive had built up a significant share interest in the company to the point that on 29 June 2009, manganese Bronze advised that Geely had a notifiable interest in 6,085,000 of the company's ordinary shares, representing 19.971% of the issued ordinary share capital.
The following year, in March 2010, Manganese Bronze announced it would move production of all taxicab bodies and chassis to Shanghai, although TX4 cabs for the UK market would continue to be assembled in Coventry.
At the same time, Geely announced it would increase its shareholding in Manganese Bronze to 51% by participating in a placement of new shares. But, significantly, by August of that same year, only five months later, Geely announced it had decided not to proceed with the share placement and its shareholding in Manganese Bronze would remain at below 20%.
Subsequently, Manganese bronze struggled with its taxicab business to the point that on 22 October 2012 it entered administration after failing to secure additional funding with PricewaterhouseCoopers (PwC) being appointed as the administrator. Manganese Bronze had not made a profit since 2007.
A week later, on 31 October PwC announced that 156 Manganese staff in the UK to be made redundant with immediate effect, out of the company's then total of 274 employees in the country, with the losses spread across its manufacturing facility, head office and dealerships.
In January 2013, it was reported that Geely was in negotiations to buy the remaining shares of the company from PwC in order to save the business. A press statement in February of this year announced that an agreement had been reached for Geely to purchase the remainder of the London Taxi Company's assets, manufacturing rights, unsold stock and dealerships, with a new company called Geely UK Ltd. resuming assembly of the London black cab in Coventry.