Coventry, England-based electric vehicle produce Modec has entered into “administration,” leaving the future of the English electric vehicle market in question and Navistar International’s partner on the eStar on the brink of collapse.
Under English law, a company enters administration when it can no longer pay its debts as a last-ditch attempt to avoid liquidation. Modec is currently being run by an administrator. According to the Coventry Telegraph, Modec was forced into administration last week after negotiations between itself and Navistar failed to reach a buyout agreement.
The company immediately laid off 26 of its 53 workers, the paper said. According to Roadtransport.com, Modec currently has debts totaling more than $64 million, but despite high hopes, had registered only 2 vehicles last year.
Paul O’Dowd, national sales manager for Modec, told Roadtransport.com the slow sales of units combined with the economy have taken its toll.
“People have been buying a smaller number of units to run trials, however, the strength of the business is that we have a complete vehicle to buy rather than [a] prototype,” he told the website. “There’s still a lot of interest for our products, and all of our customers have been very supportive as they all believe we’ll get a buyer.”
Under administration, Modec has the option of selling off assets piecemeal or seeking to find a buyer for the company as a whole. Liberty Electric Vehicles, based in Oxford, England, has emerged as a potential buyer.
“It’s a sad day for the automotive industry as the UK has become the epicenter of electric vehicle technology – a position we must not relinquish. I believe Modec needs to be rescued by a UK firm to secure jobs and retain engineering expertise in this country,” said Barry Shrier, Liberty CEO, in a statement posted on the company’s website.
The statement went on to say that Shrier believes a Liberty/Modec organization “would make a formidable player in the emerging EV sector.”
UPS operates 26 Modec all-electric vehicles in Europe, including 20 in London. FedEx also operates 6 vehicles. According to Modec’s website, there are more than 450 of the company’s vehicles operating in Europe today.
Among the options for Modec vehicles are chassis cab, dropside and box van models with bodies ranging from refrigerated, tipper, wide body, and high roof.
The company’s alliance with Navistar to develop the eStar for the U.S. market was a boon to the company. The joint vehicle the companies produced is a Class 2-3 model with a top speed of 50 mph and an operating range of 100 mi. per charge.
Navistar said back in May of last year that the first eStar market would be Portland, OR. It has since expanded its dealership network for the vehicle. The first eStar delivery took place in June 2010 when Navistar presented San Francisco-based Pacific Gas and Electric Co. with a vehicle.
It is unclear how a purchase by Liberty would impact the Modec-Navistar alliance.
At the end of December, Modec competitor Smith Electric Vehicles U.K., which was owned by the Tanfield Group, reached a purchase agreement with its U.S. subsidiary Smith Electric Vehicles U.S. (Smith) whereby the U.S. company would own 51% of Smith Electric U.K.
“This sale signals a bright future for the electric commercial vehicle industry,” said Bryan Hansel, CEO of Smith Electric U.S., at the time. “Being in a position to unify Smith’s divisions after less than two years of operating in the United States is evidence that the market for affordable, sustainable commercial fleets is fertile. The unification of Smith Electric Vehicles will create operational efficiencies and market synergies that will make Smith more financially sound and productive.”
