Radio Sandwell News

City Link closure disgraceful, RMT union says

2014-12-26 08:36:01

General Secretary of the RMT union Mick Cash called the timing "an absolute disgrace"

The Christmas Day announcement that parcel delivery firm City Link had gone into administration was "disgraceful", a union has said.

RMT general secretary Mick Cash said it was "shocking" to have "sprung this announcement once all the Christmas deliveries have been completed".

The Coventry-based firm, which employs 2,727 staff, made the move on Christmas Eve after "substantial losses".

Administrators warned of "substantial redundancies" in the coming days.

Mr Cash said the decision to go into administration was the "bitterest blow any group of workers could receive on Christmas Day".

"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," he said.

"The way it's happened... that on Christmas Day they've done this to our members is disgraceful."

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 were not guaranteed.

City Link, owned by investment firm Better Capital, called in administrators Ernst & Young because no buyer had been found to save the company.

Ernst & Young said some staff would be retained to return parcels to customers and help with winding down the company.

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

Operations will be suspended at its depots until Monday, when customers and recipients will be able to collect parcels - which they have been urged to do as soon as possible.

The firm's online parcel tracking system remains live and a phone helpline will be open on Saturday and then from 29 December.

'So furious'

Simon Judd, from Leigh-on-Sea in Essex, said: "I'm a sub-contractor with City Link, now find I have a liveried van and no work."

He added: "They've got rid of most employed drivers at my depot, and presumably nationwide. Just have to hope I can find some work elsewhere, after getting van made white."

One City Link worker, who wished to remain anonymous, called the situation "utterly disgraceful".

"I worked on Christmas Eve with no warning this would happen; I found out from the news," he said.

"I am so furious with what has happened, I have no idea what I'll do. I have no money since it's Christmas so I don't know where next month's rent will be coming from, where will I live? How will I eat?"

Hunter Kelly, of Ernst & Young, 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."

Ernst & Young will "provide support to employees relating to potential redundancies", Mr Kelly added.

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.


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