Boris Hails Black Cab as Chinese Conspiracy Theories Abound
Back in October 2012, after 4 years of financial losses that even the sight of a reformed Spice Girls dancing on a London taxi at the Olympic Games closing ceremony couldn’t help reverse, a steering wheel problem, and a £3.9 million black hole in its accounts days after the Games that forced it to delay its half-year results, makers of the iconic black cab, Manganese Bronze, called in administrators PriceWaterhouseCoopers.
That was on top of reporting four years of financial losses and struggling under increasing warranty costs. Even the worldwide PR opportunity of having the Spice Girls dancing on top of five black cabs at the closing ceremony of the Olympic Games this summer couldn’t turn around Manganese’s fortunes.
Struggling in the face of competition from Mercedes taxis supplied by Eco City Vehicles, distributors of Mercedes taxis, and the loss of its taxi manufacture monopoly in 2008, Manganese finally succumbed to the inevitable, leaving Mercedes Benz to pick up the pieces and create a 40% sales figure..
And now they have been snapped up by Geely, one of China’s biggest private car manufacturers for £11 million.
London Mayor Boris Johnson said he was “delighted” that China’s Geely had bought the taxi business out of administration, “ensuring the continuing manufacture of a world famous, fully accessible and instantly recognisable vehicle synonymous with London. London’s cabbies can now look to the future safe in the knowledge that the TX model taxi will continue to serve Londoners for many years to come.”
Geely, owners of Volvo Cars having bought it from Ford for £1.1 billion in 2010, had already had a 20% stake in Manganese Bronze prior buyout after a joint venture set up in 2006 that saw the UK business buy China-made components and body parts. And it is this part of the business that caused the steering problem that helped bring the company to its knees.
The steering boxes were made in China, by a firm introduced to Manganese by Geely, and that led to the recall of 400 of its flagship £35,000 TX4 taxis. And now Geely have bought the firm for what is a bargain £11 million.
Does it smell a bit fishy?
Some people think so, but you won’t hear any complaints from employees at their manufacturing plant in Coventry which will remain open – with a slim chance that some of the 156 workers who lost their jobs back in October when administration came may get a job back.
But today’s deal sees the Chinese firm ramp up its expansion into Europe’s auto industry; it bought.
Geely’s financial director, Daniel Li, is to become its new UK chairman and he said: “The deal will secure the long-term future of the company and maintain the production, skilled jobs and plant in Coventry. Today we have 107 people working here, and we are confident we will create some new jobs with the recovery of the business.”
Peter Johansen, former finance director of Manganese Bronze, has already been employed as executive vice president of Geely UK’s black cab operations, but of the 155 others Mr Li said that “it depends on their skills and the needs of the company. In time we will examine the potential to create new, lower-carbon vehicles which could be exported around the world. But that’s a discussion for a later day.”
In the future Geely hope to start producing new models as well as the classic TX4 as well as “examining the potential for entering the private-hire market”.
However, Mr Li warned it would “take some weeks to restart production” but he was hopeful that it would not be long before the TX4 was back amongst the 1400 new black cabs that are registered each year, joining the many that are on the road (sometimes even when you need them).