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All across the Great Western territory => The Wider Picture - related rail and other transport issues => Topic started by: Chris from Nailsea on December 25, 2014, 20:04:03



Title: City Link parcel delivery company goes into administration
Post by: Chris from Nailsea on December 25, 2014, 20:04:03
From the BBC (http://www.bbc.co.uk/news/business-30602326):

Quote
City Link parcel delivery company goes into administration

(http://news.bbcimg.co.uk/media/images/79933000/jpg/_79933639_citylink.jpg)

Parcel delivery company City Link, which employs 2,727 people, has gone into administration.

The company, owned by investment firm Better Capital, called in administrators on Christmas Eve after years of "substantial losses".

It stopped accepting parcels from customers at its head office and transport hub in Coventry, its three other transport hubs and 53 UK depots.

Administrators warned of "substantial redundancies" over the coming days. This is because no buyer has been found to save the company.

A number of staff will be retained to help return parcels to customers and help with winding down the company, said joint administrators Ernst & Young.

Operations will be suspended at all the company's depots until Monday when customers and recipients will be able to collect their parcels, which they have been urged to do as soon as possible. The firm's online parcel tracking system remains live and a help phone will be open on Saturday and then from December 29.

The other joint administrator, Hunter Kelly, 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.

"We will provide support to employees relating to potential redundancies. We are now beginning the process of realising the company's assets."

(http://news.bbcimg.co.uk/media/images/79933000/jpg/_79933720_mickcashbbc.jpg)
Mick Cash replaced the late Bob Crow as general secretary of the RMT in September

Mick Cash, general secretary of the RMT union, said: "This is the bitterest blow any group of workers could receive on Christmas Day and it is absolutely shocking that the company have sprung this announcement once all the Christmas deliveries have been completed. RMT will do everything within its power to mobilise a political and industrial fight to save the thousands of jobs that have been put at risk as a result of this shock announcement."

The RMT told its members on Christmas Eve that it understood that wages owed up to 31 December would be paid, but any further payments are not guaranteed.

It described the news in a circular as a "massive body blow to all our members at City Link who have made great efforts and sacrifices to their pay and terms and conditions in order to make the company a success since its current owners took control in 2013".

Founded in 1969, City Link said on its website 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.

I post this with a heavy heart, as a fellow delivery driver.  My heartfelt sympathy to all of those affected.  CfN.  :o


Title: Re: City Link parcel delivery company goes into administration
Post by: ellendune on December 25, 2014, 20:35:58
It semi there are now too many distribution companies chasing a finite market. If there are too many the system becomes inefficient because vans are just following each other round.


Title: Re: City Link parcel delivery company goes into administration
Post by: Chris from Nailsea on December 25, 2014, 20:42:22
Simply to clarify: I am a delivery driver for a retail grocery chain - not in competition with any parcel delivery company.  CfN.  :-X


Title: Re: City Link parcel delivery company goes into administration
Post by: bobm on December 25, 2014, 20:49:37
I must admit as a customer of City Link both as a sender and receiver I am surprised at the news. I can think of several delivery firms who are a lot worse than them.

I do however sympathise with the staff who have, no doubt, been pulling all the stops out over the last few weeks only to hear this news today.


Title: Re: City Link parcel delivery company goes into administration
Post by: LiskeardRich on December 25, 2014, 21:15:48
I must admit as a customer of City Link both as a sender and receiver I am surprised at the news. I can think of several delivery firms who are a lot worse than them.

I do however sympathise with the staff who have, no doubt, been pulling all the stops out over the last few weeks only to hear this news today.

I'm not surprised, far from it in fact. Rentokil sold it for ^1 18 months ago, along with all its debt.
Their business model was out of date and pricing uncompetitive against the market. It's a market where customers aren't particulary worried about quality and price matters.



Title: Re: City Link parcel delivery company goes into administration
Post by: ChrisB on December 26, 2014, 08:55:33
Most of the drivers have zero protection as they were sub-contrctors using their own vans, according to a report I saw last night

So, December income not gusranteed as their invoices not yet raised. Left with vans in CityLink livery that they themselves need to have removed before being able to look for other work.

Much sympathy I think. What happens when Venture Capitalists don't know how to run the types of company that they buy up. Frankly on the cards as soon as sold by Rentokill, but absolutely didn't need to do it at Christmas!

I hope many drivers appear outside the venture capitalist's office on the 5th January....and create a stink


Title: Re: City Link parcel delivery company goes into administration
Post by: LiskeardRich on December 26, 2014, 09:11:02
RMT have confirmed all will be paid up to 31st December.


Title: Re: City Link parcel delivery company goes into administration
Post by: ChrisB on December 26, 2014, 09:39:59
That's staff, not the sub-contractors


Title: Re: City Link parcel delivery company goes into administration
Post by: BerkshireBugsy on December 26, 2014, 09:48:04
It semi there are now too many distribution companies chasing a finite market. If there are too many the system becomes inefficient because vans are just following each other round.

Yes the market.may be finite but if the shopping model shifts from a presence on the high street /retail park to online shopping doesn't this also mean increased demand for delivery services ?

Just a question :)


Title: Re: City Link parcel delivery company goes into administration
Post by: ellendune on December 26, 2014, 10:06:45
It semi there are now too many distribution companies chasing a finite market. If there are too many the system becomes inefficient because vans are just following each other round.

Yes the market.may be finite but if the shopping model shifts from a presence on the high street /retail park to online shopping doesn't this also mean increased demand for delivery services ?

Just a question :)

A good question. 

There was someone on the radio today saying that customers (us) are not prepared to pay what it costs for the delivery. So prices are rock bottom. City link started in the days when they could offer a premium service.

If there is just one company (Royal Mail) going round delivering parcels then they can optimise the use of the equipment (vans and depots). These costs are fixed to provide national coverage. When there were two, those fixed costs doubled.  I don't know how many there are now, but perhaps 10 or more.  If a distribution company cannot get a big enough market share at a high enough price to cover its largely fixed costs it is in deep trouble.

The free market economy is, I am afraid, very brutal.  This is the unacceptable face of the free market economy.  It also gives an edge to Royal Mail's concerns about the effect of cherry picking on the universal postal service. 


Title: Re: City Link parcel delivery company goes into administration
Post by: BerkshireBugsy on December 26, 2014, 10:19:58
My only problem with Citylink was a geographical one (I haven't used them for a few years so this may have changed). If I missed delivery of a parcel I would have to drive from Thatcham to the far side of Reading to collect it from their office which I believe used to be on Suttons business park. But apart from that I had no issues with the service which I was prepared to pay for.

Sadly though I agree that in most cases where we are talking about low margin sales there is little opportunity to "hide" the delivery costs and that is where (in my opinion) the delivery companies are at risk when they to deliver at less than cost just to win the business.



Title: Re: City Link parcel delivery company goes into administration
Post by: grahame on December 26, 2014, 10:20:44
Yes the market.may be finite but if the shopping model shifts from a presence on the high street /retail park to online shopping doesn't this also mean increased demand for delivery services ?

Just a question :)

When I saw the City Link news, I was reminded of a TV piece I saw the other day (BBC, ? local) about the huge difference online shopping has made to the rural community, and saw their filming as they drove up the road from Tintern towards Monmouth, counting vehicles and comment on what a very high percentage of them were local delivery vehicles of some sort.

Certainly while we (on this forum) support public passenger transport, the ability to get a very wide range of products to the remotest of spots is no bad thing.  In reality, that ability has been there for many years, but until we had the internet the choosing and ordering end of the cycle was rather more difficult, and people tended to go into their local town for a far more limited (and expensive) range of products, and at an inefficient use of their time.   The rural and domestic urban online ordering and delivery has, though, hit bus use as fewer journeys are needed.

Are all delivery vehicles busy and running full all of the time?   I suspect there's rather a lot of duplication going on (as a small business it's not unusual for us to receive several deliveries in a day) and there is, I'm sure scope for efficiency.  Let's hope that the market is growing strongly enough for all of those who have no ongoing work through CityLink to find suitable alternatives;  I have (personally) been through redundancy twice and whilst it was a shock at the time, it meant that within a certain period I had moved on from a struggling business to an exciting one with prospects, and I didn't look back.


Title: Re: City Link parcel delivery company goes into administration
Post by: BerkshireBugsy on December 26, 2014, 10:35:43
Good points well made Graham.

I have to be honest and say that whilst I'm not really surprised there has been a distribution company that has gone under they weren't the first and they won't be the last.

I do feel sorry for the staff who may have seen this coming but had to find out for sure on Christmas Day. My other concern is that I believe some distribution firms like Citylink effectively sub contract out the end point collection and delivery aspects. So the green and yellow vans we know are owned by the drivers and have to be "liveried" at the drivers cost.

So whilst the drivers still have their vans they still have to pay out to have them "unbranded" out of their own pockets


Title: Re: City Link parcel delivery company goes into administration
Post by: eightf48544 on December 27, 2014, 12:17:59
Roland Hill recognised that the postal service is a natural monopoly if it is to provided a universal service. He was a Victorian!

Hence the "Penny Black"

Competiton doesn't work what's the points of different postal services running half empty lorries up the M1 with mail for Birmingham when a train from Willesden can carry the lot. 

Also natural monopolies  are railways, buses. Competition within and between different forms of public transport is pointless.

 


Title: Re: City Link parcel delivery company goes into administration
Post by: ChrisB on December 27, 2014, 13:32:15
Wh? Citylink aren't public transport, neither do they deliver post?

They're a courier company


Title: Re: City Link parcel delivery company goes into administration
Post by: Electric train on December 27, 2014, 16:47:27
Wh? Citylink aren't public transport, neither do they deliver post?

They're a courier company

Citylink are the last mortal remains of the railway parcels service, Citylink bought (or were given) Red Star hence the link with the RMT


Title: Re: City Link parcel delivery company goes into administration
Post by: ChrisB on December 27, 2014, 19:29:16
Eightf referred to both post & piblic transport re Citylink. Hence my clarification


Title: Re: City Link parcel delivery company goes into administration
Post by: Electric train on December 28, 2014, 08:32:30
Eightf referred to both post & piblic transport re Citylink. Hence my clarification
Granted, and you point is correct :)


Title: Re: City Link parcel delivery company goes into administration
Post by: Chris from Nailsea on December 28, 2014, 12:38:01
From the BBC (http://www.bbc.co.uk/news/business-30614090):

Quote
City Link: 2,000 staff to be made redundant on NYE - RMT

More than 2,000 staff from the collapsed UK parcel delivery service City Link are to be made redundant on New Year's Eve, the RMT union has said.

Staff learned on Christmas Day that the company had gone into administration, in a move described as "disgraceful" by the union for transport workers.

Talks between union officials and administrators EY were held on Saturday afternoon. EY warned of "substantial redundancies over the coming days".

Coventry-based City Link, which is owned by investment firm Better Capital, employs 2,727 people. It called in administrators on Christmas Eve after years of "substantial losses".

Following Saturday's talks, the RMT demanded an immediate meeting with Business Secretary Vince Cable and called on the government to launch a rescue plan to save the company as a going concern.

The union said it had been told by administrators that more than 2,000 staff will be made redundant on New Year's Eve. Remaining staff will be retained in the short term to wind down the company, union officials said.

Mick Cash, RMT general secretary, called the situation a "despicable and callous manipulation" of thousands of workers. He said: "It is crystal clear that there has been a truly horrific catalogue of mismanagement at City Link and that staff and their union have been starved of basic information."

The government has previously said it was unable to intervene in the administration process, although Mr Cable said he would meet the union in the New Year.

However, Mr Cash said: "Clearly that is too late and the business will have been smashed to pieces by then. If the government can nationalise the bankers then they can nationalise City Link, which is clearly in the public interest," he added.

The firm, which was founded in 1969, was acquired by restructuring specialist Better Capital in April 2013. It invested ^40m but EY said City Link had incurred substantial losses over several years and the money could not help it turn the firm around.

EY said it was currently assessing the company and the status of existing orders. "This process will have a bearing on the number of employees retained and those that unfortunately face redundancy in the next few days," it said in a statement. "It is anticipated that there will be substantial redundancies over the coming days, at which point the administrators will provide a further update." It said it anticipated that "a portion of employees" would be retained for up to three months.

Administrators were currently gathering expressions of interest from parties interested in acquiring specific assets, divisions of the business or the entire firm, it added. But given the previous unsuccessful sale process administrators were "cautious about the prospects of finding a buyer", the statement added.


Title: Re: City Link parcel delivery company goes into administration
Post by: ChrisB on December 28, 2014, 12:59:04
"Clearly in the public interest"....

I'd like to see their explanation for that....the country will continue to trade with or without unfortunately


Title: Re: City Link parcel delivery company goes into administration
Post by: ellendune on December 28, 2014, 13:03:10
"Clearly in the public interest"....

I'd like to see their explanation for that....the country will continue to trade with or without unfortunately

Agreed - and, unfortunately, it could be argued that a correction to the oversupply will make the other carriers more viable.


Title: Re: City Link parcel delivery company goes into administration
Post by: didcotdean on December 28, 2014, 14:10:57
City Link hasn't turned a profit since 2007 - it must have burnt through tens of millions of pounds of its owners' money in that time.

I suspect when they called in for offers to buy bits of the company they asked too much. Existing carriers probably aren't interested in City Link's depots or systems, which are reported to be behind the times. Contracts were also up for sale, but other carriers would pick them up anyway, as has happened with John Lewis'. The rest will be picked up much more cheaply from the administrators/liquidators.

It has also been claimed that an erroneous report on Christmas Eve that City Link was already in administration sealed its fate as it then had to enter to protect against creditors and this scared off any ongoing interest. This report was an e-mail from an RMT official.


Title: Re: City Link parcel delivery company goes into administration
Post by: JayMac on December 28, 2014, 14:14:02
More business for Yodel. Heaven help us.  ::)


Title: Re: City Link parcel delivery company goes into administration
Post by: tomL on December 28, 2014, 14:19:46
More business for Yodel. Heaven help us.  ::)


Rather DPD take the business. But hey, ho.  ;D


Title: Re: City Link parcel delivery company goes into administration
Post by: Surrey 455 on December 28, 2014, 21:43:38
Before Christmas we heard that Yodel and others apparently are struggling to keep up with the volume of parcels that we are ordering online so I was surprised to receive an alert today (Sunday!) from Amazon to tell me that they would be delivering part of my order today. The one that I placed yesterday morning. Don't know which courier company they used but there it was on my doormat this afternoon. I checked and double checked on my Amazon profile page to see if I had accidentally selected Prime. No, I hadn't. I checked my emails. This part of the order was scheduled to arrive from Fri 2nd Jan onwards so looks like Amazon or their couriers have a bit of time on their hands.


Title: Re: City Link parcel delivery company goes into administration
Post by: Chris from Nailsea on December 28, 2014, 22:00:41
My son has also been pleasantly startled to receive deliveries of items ordered online from Amazon, way before he expected them to arrive - and he's an impatient teenager!  :o ::) ;D


Title: Re: City Link parcel delivery company goes into administration
Post by: JayMac on December 28, 2014, 22:18:59
I've been invited to like a Facebook page calling for the nationalisation of City Link.

That isn't going to happen. I feel for those who are facing redundancy, but a government bail out is not the answer. They are reserved for the political classes' friends in the banking industry.


Title: Re: City Link parcel delivery company goes into administration
Post by: LiskeardRich on December 28, 2014, 22:22:20
Before Christmas we heard that Yodel and others apparently are struggling to keep up with the volume of parcels that we are ordering online so I was surprised to receive an alert today (Sunday!) from Amazon to tell me that they would be delivering part of my order today. The one that I placed yesterday morning. Don't know which courier company they used but there it was on my doormat this afternoon. I checked and double checked on my Amazon profile page to see if I had accidentally selected Prime. No, I hadn't. I checked my emails. This part of the order was scheduled to arrive from Fri 2nd Jan onwards so looks like Amazon or their couriers have a bit of time on their hands.

I had a load of stuff arrive on a Sunday from Amazon a month or so ago, that I'd only ordered on the Friday. Not sure which courier as I was out and it was left with a neighbour. I was surprised for a Sunday delivery more than the speed


Title: Re: City Link parcel delivery company goes into administration
Post by: didcotdean on December 28, 2014, 23:47:31
The RMT itself has an option to explore - to buy the business off the administrators and run it as a workers' cooperative.


Title: Re: City Link parcel delivery company goes into administration
Post by: Chris from Nailsea on December 28, 2014, 23:53:38
Is that possibly what they were planning, behind the scenes?  :o

It has also been claimed that an erroneous report on Christmas Eve that City Link was already in administration sealed its fate as it then had to enter to protect against creditors and this scared off any ongoing interest. This report was an e-mail from an RMT official.


Title: Re: City Link parcel delivery company goes into administration
Post by: tomL on December 29, 2014, 00:06:45
Amazon have their own company/service under the name of "Amazon Logistics" who run 7 days a week and if you're on prime and you order most things before 7pm it'll be at your door the next day. Crazy, but it works apart from the occasional routing error which makes people have to wait a whopping two days!  :o :o ;D

I believe the cheaper delivery options are contracted out to a handful of the (remaining) courier and postal companies.

Note: as much as it sounds like Amazon is consuming the industry whole many other sellers on Amazon still use Royal Mail and other courier services.


Title: Re: City Link parcel delivery company goes into administration
Post by: Chris from Nailsea on December 29, 2014, 17:03:14
From the BBC (http://www.bbc.co.uk/news/business-30621884):

Quote
City Link owner defends handling of firm's administration

Jon Moulton, the founder of the company which owned collapsed UK parcels firm City Link, said its administration was handled in the best way possible.

News of the collapse was announced on Christmas Eve, but Mr Moulton said the timing could not have been avoided.

On Monday, the administrators which now run City Link, said they had begun telling the 2,727 staff that "substantial" job cuts were now likely.

There are still about 40,000 parcels at City Link depots across the country. Customers are being urged to collect parcels from depots from Monday.

Mr Moulton, founder of investment business Better Capital, told Radio 4's Today programme: "We chased every possible way to save this company."

He said that delaying the closure of City Link over Christmas had not been an option, as trading while insolvent was a criminal offence.

"We're very sorry about the failure of City Link and we're very sorry about the horrible effects that will follow for the workforce and contractors," Mr Moulton said. "I'm afraid that is the result of the company failing, nothing more nothing less."

He also defended criticism that taxpayers would end up paying for City Link staff's redundancy following administrator Ernst & Young's (EY) statement that it would refer employees to the government's statutory redundancy payments scheme.

Transport Union RMT's General Secretary Mick Cash said: "It says everything about the state of industry in Britain today that a donor to the party of government can wreck the lives of thousands of people, walk away and leave the taxpayer to pick up the redundancy costs."

But Mr Moulton said: "I don't think the taxpayer is going to end up footing much of a bill on this." He said that City Link had paid "a fortune" in taxes such as PAYE and said ultimately the government would be a net beneficiary of Better Capital's investment in the firm.

"The taxpayer has certainly made an enormous amount of money out of private equity companies and their trading and success. We are looking after money that has been given to us to invest, we are in the business of trying to make money for our investors," he added.

(http://news.bbcimg.co.uk/media/images/79972000/jpg/_79972372_79967151.jpg)
Picket line outside a City Link depot

Mr Moulton, a multi-millionaire, said he personally had lost ^2m on the firm's investment in City Link.

Earlier on Monday, Better Capital said in its first statement since the firm went into administration, that it had tried various options to "maximise" its investment in City Link, including an unsuccessful attempt to sell the business. "In light of continued substantial losses, City Link could not continue as a going concern," it said.

City Link, which was founded in 1969, was acquired by restructuring specialist Better Capital for just ^1 in April 2013.

Meanwhile, in a statement on Monday, Ernst & Young said it had begun telling staff to expect heavy job cuts. "While no redundancies have been made today, the joint administrators believe that the company will unfortunately have to make substantial redundancies, which will take effect on 31 December. Employees that are not immediately affected by redundancies will continue to be employed, and paid, to help return the estimated 40,000 parcels remaining in City Link's depots to customers and intended recipients, as well as assist in realising the company's assets and winding down its operations," the company said.

The firm has said that parcel depots would "remain open for a short period of time" to enable customers and intended recipients to collect their parcels. It advised customers to use City Link's online tracking system to find out which depot to go to.

Coventry-based City Link called in administrators on Christmas Eve after years of "substantial losses".

Union RMT said it had been told by administrators that more than 2,000 staff will be made redundant on New Year's Eve. Remaining staff will be retained in the short term to wind down the company, union officials said.


Title: Re: City Link parcel delivery company goes into administration
Post by: ChrisB on December 29, 2014, 17:15:22
All the company had to do was to inject enough capital for a further month. Should have been done


Title: Re: City Link parcel delivery company goes into administration
Post by: Chris from Nailsea on December 31, 2014, 15:57:12
From the BBC (http://www.bbc.co.uk/news/uk-england-stoke-staffordshire-30632898):

Quote
City Link collapse: APC aims to take on axed staff

A Staffordshire delivery firm has said it will make up to 100 jobs available to workers made redundant by the collapse of rival courier City Link.

APC Overnight said it would give priority to former City Link staff in filling vacancies at its national sorting centre in Cannock.

Coventry-based City Link collapsed over Christmas. Its 2,727-strong workforce have been told to expect "substantial redundancies".

APC Overnight chief executive Karl Brown said: "This is an extremely difficult time for City Link staff members and their families. Following discussions with board members, we've made the decision to prioritise City Link staff for the job vacancies we currently have on offer."

He added further posts may also be made available at 115 other APC depots throughout the UK.


Title: Re: City Link parcel delivery company goes into administration
Post by: Chris from Nailsea on January 01, 2015, 00:34:55
From the BBC (http://www.bbc.co.uk/news/business-30646076):

Quote
City Link announces 2,356 job losses after rescue talks fail

The administrators of collapsed delivery firm City Link have announced 2,356 job losses after a bid to buy the company failed.

The administrators, who took over City Link on Christmas Eve, said an unnamed consortium's offer was not acceptable. The possible buyer "offered no money up front and significantly undervalued the assets to be acquired," they said.

Business Secretary Vince Cable said the government has put measures in place to help the affected staff find new jobs.

The Coventry-based company was founded in 1969 and employed 2,727 people, but suffered years of losses.

City Link was bought by Better Capital for ^1 in April 2013 but the administrators from Ernst & Young say the ^40m the investment company put into the firm was not enough to turn it around.

Just over 370 City Link staff have been kept on to deal with the parcels that remain at depots and help run down the business.

The administrators said they had proposed alternative purchase terms to the consortium "that would be acceptable and common in these situations. The consortium, despite attempts to make them reconsider, declined to amend their original offer".

Speculation about a potential rescue deal emerged earlier on Wednesday when Mr Cash disclosed that he had been told of "a credible bid to take over some or all of the City Link trading operations".

Following confirmation that the rescue had failed, Mick Cash, general secretary of the RMT union, said: "Pulling the plug on any efforts to save City Link is a disgraceful and cynical betrayal that will wreck the lives of our members, many of whom are owed thousands of pounds."

The mass redundancies would leaving a "trail of human misery", he said, adding: "Those responsible will slink away with their own resources ring fenced and leaving the taxpayer to pick up the redundancy tab. The City Link Christmas destruction is an act of industrial vandalism that shames our nation while the government looked on and offered nothing but hollow words."

The business secretary the announcement of job losses was "very sad news for the City Link workers and their families at a particularly difficult time of year".

Mr Cable said City Link's employees and self-employed drivers will be able to access a government service run by job centres and the support of skills bodies.

He added: "A Facebook page has been set-up to link-up companies holding suitable vacancies with those who have been made redundant, so if drivers can be redeployed into new jobs in this competitive buoyant market they will be."

Shadow business secretary Chuka Umunna said he was "very saddened" to hear the talks to secure a buyer had failed. He tweeted: "City Link employees will quite rightly be furious at the disgraceful way in which they have been treated."

The manner and timing of City Link's collapse have been criticised, including by two Conservative MPs. One, former minister Damian Green, said: "The whole business has been handled very badly."

On Monday, Jon Moulton, founder of Better Capital, apologised for the impact on staff but said there was no alternative but to put the loss-making business into administration.

Hunter Kelly, one of the administrators, said in a statement on Wednesday: "It is with regret that we have to announce substantial redundancies at City Link Limited, which ceased accepting new parcels on 24 December 2014. The company endured substantial losses, which ultimately became too great for it to continue as a going concern, and City Link Limited entered administration following an unsuccessful sale process."


Title: Re: City Link parcel delivery company goes into administration
Post by: Chris from Nailsea on January 29, 2015, 20:41:53
From the BBC (http://www.bbc.co.uk/news/business-31011151):

Quote
City Link owner Jon Moulton says overtime will be paid

(http://news.bbcimg.co.uk/media/images/79972000/jpg/_79972373_jonm11.jpg)
Mr Moulton said in hindsight it had been a huge mistake buying City Link

City Link employees will receive overtime payments, according to the founder of the company which owns the collapsed parcel delivery firm.

Jon Moulton made the comments during an appearance before MPs who were looking into how the firm ended up in administration on Christmas Day.

His investment company, Better Capital, bought City Link in 2013 for ^1.

Mr Moulton was questioned repeatedly over the role of his firm in City Link's collapse.

City Link had been been struggling for many years before Mr Moulton's private equity company took it over. Mr Moulton said they had been unable to turn it around.

"We have lost twenty million pounds," said Mr Moulton in a joint session of the Scottish Affairs Committee and the Business, Innovation and Skills Committee.

"There was no brilliant game, property angle, nothing taken out the back door. We killed ourselves to try to save this company and we failed."

However, he had a word of reassurance for workers who feared they would lose their overtime payments.

"It's my understanding that they will receive 100% of their overtime," he said.

At the beginning of November Mr Moulton said the firm was in active discussions to sell City Link as well as pursuing refinancing plans.

On 18 December, Mr Moulton said he had been in contact with the Department for Business advising that administration was a serious possibility.

It was only on 22 December that it became clear there was no solution and that administration was unavoidable, he said.

Mr Moulton said he had hoped to put the business into administration on Boxing Day, "the least worst solution".

"We were in the horrible position, that insolvency was inevitable on December 22 but this would have had a catastrophic effect on the public with undelivered parcels."

He said that Better Capital had injected another two million pounds into the City Link on 22 December to cover payments to cover the cost of deliveries on 23 and 24 December.

He also faced criticism for the way the company changed employment terms, which resulted in many workers becoming self employed contractors.

"I don't see there was anything wrong in changing terms and making people self-employed. Some will have done better out of it, some worse. I am sure both happened," he said.

Mr Moulton said the taxpayer would have to foot an estimated ^4m bill for staff redundancy payments.

In hindsight, he said it was a huge mistake buying the loss making firm. He admitted that the decision to invest in City Link had been a mistake and that it had harmed his reputation.


Title: Re: City Link parcel delivery company goes into administration
Post by: Chris from Nailsea on October 15, 2015, 14:55:00
An update, from the BBC (http://www.bbc.co.uk/news/business-34532809):

Quote
City Link former directors face trial in November

Ex-directors of failed parcel firm City Link are being prosecuted under section 194 of the Trade Union and Labour Relations (Consolidation) Act 1992.

They will be tried at Coventry Magistrates' Court on 5 and 6 November.

An Insolvency Service spokesman confirmed that "criminal proceedings have been commenced against David Smith, Robert Peto and Thomas Wright".

"We will not be commenting until the criminal proceedings have been concluded," they added.

The Insolvency Service said that the Department for Business, Innovation and Skills (BIS) was bringing the prosecution on its behalf.

Coventry-based City Link, owned by investment firm Better Capital, called in administrators on Christmas Eve after "substantial losses".

On New Year's Eve it announced 2,356 job losses after a bid to buy the company failed. A week later it announced a further 230 redundancies.

The company was founded in 1969. It was bought by Better Capital for ^1 in April 2013.


Title: Re: City Link parcel delivery company goes into administration
Post by: ChrisB on October 15, 2015, 16:11:47
What that doesn't explain is that, if making more than a proscribed number redundant together, the firm has to notify the Department well in advance, which the Directors obviously failed to do, hence this prosecution.


Title: Re: City Link parcel delivery company goes into administration
Post by: JayMac on October 15, 2015, 16:36:46
What that doesn't explain is that, if making more than a proscribed number redundant together, the firm has to notify the Department well in advance, which the Directors obviously failed to do, hence this prosecution.

Which the directors are accused of not doing so. Important distinction. Innocent until proven guilty, sub judice, etc...


Title: Re: City Link parcel delivery company goes into administration
Post by: trainer on October 15, 2015, 22:37:52
What that doesn't explain is that, if making more than a proscribed number redundant together, the firm has to notify the Department well in advance, which the Directors obviously failed to do, hence this prosecution.

I suspect that it's actually making more than a prescribed number redundant without notice which is proscribed.  ;)


Title: Re: City Link parcel delivery company goes into administration
Post by: Chris from Nailsea on October 15, 2015, 22:59:53
Written with a red pen: "6/10 See me after the lesson."  ::) ;) ;D



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