Sector: Manufacturing

Worries that recession will force UK manufacturers to shift production to cheaper overseas plants intensified in March, with black-cab-maker Manganese Bronze revealing plans to axe 60 jobs by shifting chassis production to China.

In a further blow to the manufacturing space, Manganese, which already largely manufactures in the People’s Republic, announced that it would cease production of TX4 bodies and chassis in the West Midlands later this year.

Coventry-based Manganese has also revealed that it is to fall under the control of Far East car-maker the Geely Group, the Chinese company which already owns a 23 per cent stake and which is taking control of the firm through a 70p-per-share placing to fund vehicle assembly, development and distribution.

Manganese saw UK vehicle sales fall from 1,951 to 1,724 in 2009, and the firm said the UK market continued to be challenging. Chief executive John Russell explained, ‘2009 was a difficult year for our UK taxi-manufacturing operation, with significant discount and sales incentives to stimulate the market combined with price pressure and restricted terms from fragile UK suppliers.

‘Our UK consultation process is almost complete, which will lead to a smaller, lower-cost UK operation with a much greater level of supply from China.’

Manganese, whose profits have slumped since the credit crunch began, is already a 48 per cent shareholder in a joint venture with Geely in China called Shanghai LTI, which makes cabs for the international market.

As part of its plans to link up with Geely, the company, which currently commands a £26 million London price tag, will switch its listing from the Main Board to AIM.