London Taxi Maker Suspends Sales to Fix Defect

Manganese Bronze Holdings plc, the maker of the iconic boxy London black taxi cab, has recalled about 400 of its TX4 taxis built since February to fix a steering flaw.

Manganese Bronze also suspended sales of the model until it develops a solution to the defective steering box. The company says two drivers reported within the past few weeks that steering of their cabs became difficult and almost locked.

The problem was caused by a switch to new Chinese steering system in February, according to the Coventry, England-based company. It says the halt in car sales will have a "material and detrimental" effect on cash flow and working capital.

Analysts opine that the actions call into question Manganese Bronze's financial viability. The taxi maker already has suffered from operating losses, accounting problems and an earlier recall related to engine compartment fires.

The London Stock Exchange's AIM international market has suspended trading of the company's shares. AIM says the company's stock won't resume trading until Manganese Bronze finds a fix for the steering problem and clarifies its financial condition.

China's Zhejiang Geely Holding Group Co. has owned 20% of the taxi maker since 2007. Manganese Bronze has been sourcing more components from Chinese suppliers lately to cut costs.

Geely officials are flying to the U.K. on Monday for emergency talks on bailing out the taxi maker, the London-based Sunday Times reports.