City Link closure timing was disgraceful, says union

[TrueBlueTerrier]

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RMT demands talks with business secretary after Christmas Day announcement that firm had gone into administration

A union has said the timing of an announcement that nearly 3,000 workers are facing redundancies over the holidays is disgraceful.

The RMT demanded urgent talks with the business secretary, Vince Cable, after it was revealed on Christmas Day that parcel delivery group City Link had gone into administration.

City Link, which has 2,727 employees, called in administrators from professional services firm EY after years of “substantial losses”.

The Coventry-based company, which is understood to count John Lewis among its largest clients, now expects numerous redundancies after no buyer could be found to bail it out.

The RMT said it believed there may have been more cynical motives behind the decision to “delay” the announcement until Christmas Day and demanded an investigation.

It said it had been told City Link was in administration on Christmas Eve, a fact neither the company nor the administrators were prepared to confirm publicly until the following day.

Mick Cash, the RMT general secretary, said: “The delayed timing of the announcement that City Link was in administration to tea time on Christmas Day stinks to high heaven.

“Not only was it the most brutal and callous way to treat nearly 3,000 staff but RMT believes there may have been more cynical motives behind it, which we want the government to investigate.

“The disgraceful timing of the City Link announcement at the start of the festive season must not be allowed to delay and hamper efforts to rescue the jobs. That is why RMT is demanding urgent meetings with both the administrators and Vince Cable, we will tolerate no dragging of heels.”

Cash has vowed that the union would “do everything within its power to mobilise a political and industrial fight” to save jobs.

City Link operations have been suspended at all its depots until Monday, when customers and those expecting deliveries will be able to collect their parcels.

Hunter Kelly, joint administrator to City Link, said: “City Link Limited has incurred substantial losses over several years.

“These losses reflect a combination of intense competition in the sector, changing customer and parcel recipient preferences, and difficulties for the company in reducing its cost base.

“The strain of these losses became too great and all but used up Better Capital’s £40m investment, which was made in 2013 and intended to help to turn around the company.

“Despite the best efforts to save City Link Limited, including marketing the company for sale, it could not continue to operate as a going concern and administrators were appointed.”

Investment firm Better Capital, led by veteran venture capitalist Jon Moulton, bought the courier group for just £1 in April last year from the previous owner, pest control firm Rentokil.

A number of staff will be retained to help return parcels to customers and help with winding down the company, EY said.

Customers who had placed parcels with the company on Christmas Eve and intended recipients who have been notified of a failed or pending delivery are urged to retrieve their parcels as soon as possible on or after 29 December.

They can do so at the company’s 53 depots throughout the UK, which will remain open for a short period of time to enable people to collect their parcels.

Founded in 1969, City Link said on its website that it had annual revenues of approximately £300m, a fleet of 1,700 vehicles and delivered 60 million items across the UK and worldwide each year.

[Lounge Lizard]

"Founded in 1969, City Link said on its website that it had annual revenues of approximately £300m, a fleet of 1,700 vehicles and delivered 60 million items across the UK and worldwide each year." - so that was only about two parcels a year to each UK household so much driving to be expected between each delivery and, in that respect, not as efficient as Royal Mail.

[Dorset Plodder]

Fancy that they suspect cynical and underhand tactics from the Management? About par for the course I would have thought! I feel really sorry for the staff losing their jobs at Christmas....I expect all the Directors will depart with their "Golden Handshakes & Pensions" intact.

I count myself lucky that my wife's present arrived in time as it was being delivered by City Link. Is this perhaps the first sign that our Competitors are starting to fall by the wayside because they haven't got the infrastructure to do the job? Perhaps we'll be able to pick up the slack, because we haven't got enough parcels!