Iconic London taxi faces uncertain future
The maker of London’s famed black cabs has filed for bankruptcy protection. Recession, quality issues and competition have hit profits.
A British icon is in jeopardy. The company that makes the traditional London black taxi cab has filed for the British equivalent of Chapter 11 bankruptcy protection. The firm -- Manganese Bronze, also known as The London Taxi Co. -- hasn't made a profit in four years and was unable to reschedule its debts. If it can't find a buyer, the company could go bust, and its world-famous product could -- over time -- disappear from the streets of London.
Manganese Bronze is the ultimate, niche company and it is getting more marginal by the day. Five years ago, it was making around 3,000 cabs for the British market. Last year, that had fallen to 1,500 and it is falling again this year.
The company has been hit by the U.K. recession and by increased competition from much more powerful rivals. Mercedes and Peugeot have both made inroads into the British cab market.
But the British firm’s most immediate difficulty stems from a mechanical fault. A defective steering mechanism triggered the recall of 400 vehicles and meant that the company could not sell any more cabs. Cash flow dried up. The company ran out of money.
Critics of Manganese Bronze blame the management. “It is an extremely badly run and managed company," says Johnathon Myers, who runs a trade organization for drivers, the United Cabbies Group. “For years, they have treated the drivers with contempt and rudeness. They have given us a very poor service.”
However, Myers believes that the company’s financial crisis could be a turning point. The Chinese company, Geely, which bought the Swedish car maker Volvo, also owns a 20 percent stake in Manganese Bronze. Myers would like the Chinese to ride to rescue.
“What we’re hoping,” he says, “is that they will buy the company, and put a Volvo engine in it and start treating cab drivers with a bit of dignity.”
Manganese Bronze rejects the allegations of bad management. The company says it needs fresh capital to withstand the recession and develop new models. CEO John Russell would welcome an American investor.
“We have tremendous interest in taking the vehicle to America,” says Russell. “And if we could find a partner that could fund the changes that would make the vehicle legal in the U.S., I think we would open up a massive market.”