Anger as delivery firm announces administration blow

Business news from the Peterborough Telegraph, peterboroughtoday.co.uk, @peterboroughtel on Twitter, Facebook.com/peterboroughtoday
Business news from the Peterborough Telegraph, peterboroughtoday.co.uk, @peterboroughtel on Twitter, Facebook.com/peterboroughtoday
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A union has branded as “disgraceful” the timing of an announcement that workers at delivery group City Link - which has a depot in Peterborough - are facing redundancies over the holidays.

The RMT demanded “urgent talks” with Business Secretary Vince Cable after it was revealed on Christmas Day that the parcel delivery group which has a depot at the Darlows Business Park in Fengate, Peterborough, 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 or 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 3000 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. “

Mr 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 £40 million 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 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 December 29.

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 £300 million, a fleet of 1,700 vehicles and delivered 60 million items across the UK and worldwide each year.

In response to the “regrettable news”, John Lewis later said it has transferred all business with City Link to alternative carriers.

Shadow Business Secretary Chuka Umunna said on Twitter: “Feel terribly for City Link workers subjected to Christmas uncertainty. It’s inexcusably cruel allowing things to reach this point at this time.

“I very much hope that a buyer can be found for as much of the City Link business as possible so the maximum number of jobs can be saved.”

Mr Cable said in a statement: “This is a bitter blow to the workforce, many of whom have served the company loyally and now face huge uncertainty over Christmas. I have asked my officials to be kept abreast of any developments in this case and I will happily meet the union in the New Year.”