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London Black Cab Firm Calls In Administrators

(c) Sky News 2012

The boss of the maker of the world famous London black cab has told Sky News he does not know when taxi production will resume after the firm called in administrators.

Manganese Bronze's chief executive John Russell admitted crisis talks to save the business had collapsed.

"We've had a very difficult time over the last four years - the credit crunch has been very hard on us," he said.

"The board of directors have been wrestling with this problem, trying to find funding solutions to keep the business in operation. Efforts... have proved fruitless."

He admitted the move had come as a major blow to the company's 288 employees, whose jobs are now at risk.

"It's a tough time for everybody We've announced the situation to our staff this morning," he said.

"I'm sure it's creating tremendous uncertainty."

He said staff are still being paid - but when asked when production of the iconic taxis would resume he said: "We don't know the answer to that yet."

The embattled black cab-manufacturer, which has been reporting losses since 2008, had hoped that a deal could be reached with Chinese carmaker Geely - its second largest shareholder.

However, in a statement it said it remained "hopeful that the fundamental strengths of the company, the TX4 model and its global reputation" would provide the platform for a successful business in the future.

Problems had developed with a safety defect in the new models of the TX4 - as well as accounting issues following the introduction of a new IT system.

The company - based in Coventry in the West Midlands - launched an emergency recall of 400 TX4 Hackney carriages earlier this month after discovering a steering box fault.

The product recall on October 12 prompted a halt in sales, while shares were also suspended in the company.

Since then, the financial position of the firm has remained unclear.

"A speedy resolution of the product recall ... remains the top priority for the group and will continue to do so throughout the administration process," the company added.

PricewaterhouseCoopers will be handling the administration process.

The recall is the latest in a spate of issues that have plagued the taxi maker at a time when rival Eco City Vehicles (LSE: ECV.L - news) , which sells the Mercedes Vito taxi, has been gaining market share.

Manganese Bronze's shares had lost more than two-thirds of their value since the beginning of the year to October 11 - the last trading day before the stock was suspended.

Midlands manufacturer Russell Luckock said: "The demise of Manganese Bronze was not really a surprise, although the speed of this disaster has caught some British suppliers.

"Their problems with the steering box was going to be very expensive.

"Geely might do a deal with the administrators, but the market is such that any supplier of this type of vehicle will find it a marginal operation."