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2009 Issues Archive
19 August 2009
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Obama backs Coventry van maker
A small firm making electric vans in Coventry is set to benefit from a $39 million (£23 million) US government grant to set up a factory and sell its “green” vehicles in the American market.
Modec, which employs 80 people and was founded in 2004, is in discussion with US commercial vehicle maker Navistar to form a joint venture. Under the agreement, Navistar will be licensed to produce Modec’s van, which is used primarily by delivery companies in urban areas, in North and South America.
The funding for the joint venture, which was announced this month by US President Barack Obama, will help to set up a production facility for the electric vans in Elkhart, Indiana. It is part of a $2.4 billion funding package to encourage electric vehicle production in the US.
The UK government refused Birmingham van maker LDV funding to develop electric vehicles in June as the company went into administration with 850 job losses.
The US announcement provides a much-needed boost for Modec. The company’s van has sold in moderate numbers for several years, with a predicted surge in demand failing to materialise.
Bill Gillespie, chief executive of Modec, said: “We underestimated the reluctance of people to accept new technologies. But for a massive company like Navistar, which has a $13 billion turnover, to come to Modec with its 80 employees is a great endorsement. It shows the technical strength of our product and we’re very confident this will secure more sales in the future.”
The company will sell 270 vehicles this year, and plans to sell 1,000 next year. Around 400 vehicles will be built for Navistar at the Coventry plant over the next 18 months, with supply moving gradually to kits of components. Key components will continue to be sourced and made in the UK, said Gillespie.
Around 130 extra people will be employed over the next six months, including engineers and designers to develop the van. Gillespie said: “This secures our future and will enable us to develop the intellectual property of the vehicle, to keep our market lead.” He added that using Modec’s design will enable Navistar to get to market quickly.
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© PE Publishing, 19 August 2009
