City Link goes bust
 

http://www.bbc.co.uk/news/business-30602326

A shame, as they were the only delivery firm that did the job properly for me. :(

Re: City Link goes bust
 

they deliver most of the stuff to my office :(

Re: City Link goes bust
 

And there will be many more going the way of the dodo in the coming weeks methinks.

Re: City Link goes bust
 

Disappointing for the staff and their families.

The writing was on the wall for years. If I recall correctly the entire business was sold to Better Capital for just £1.00 a year or so ago.

Re: City Link goes bust
 

Seriously ? Does he think they went out of business delibetately ?

Re: City Link goes bust
 

You cant call in administrators any other way.

Re: City Link goes bust
 

Maybe the union played a part it its demise.

This was last year


http://postandparcel.info/57756/news...-to-christmas/

Re: City Link goes bust
 

More than likely this:

Last month, Better Capital wrote down the value of its £40m investment in City Link by 50% .....".

Re: City Link goes bust
 

In the link it states they were a Perrenial loss maker, yet the union wanted to take them out on strike for more money?

Re: City Link goes bust
 

I was only just thinking how nice it was to have had a Christmas without mention of Bob Crow* stirring up trouble and strikes...

Sympathies for those who'll lose jobs but it'll be interesting to find out more about what's been going on.

(PS Yes I do know he's dead - I'm referring to his mention in the article linked to.)

Re: City Link goes bust
 

That was BECAUSE it was making a loss, not the reason for it.
Despite the £40m investment, it was still making a loss.

Re: City Link goes bust
 

Sounds about right for a union.

Re: City Link goes bust
 

From the link provided by Top banana;

"Scott Maynard, the City Link human resources director, said his company had been consulting with front line staff since June to make pay and conditions “fairer and more equitable”

“At the moment we are in the position where colleagues doing the same job in the same depot are getting paid different wages. This is a legacy that the current management team has inherited and is one we believe is fundamentally unfair,” said Maynard. “The proposals we have put forward will resolve this while ensuring that the vast majority of colleagues see no reduction in their pay packet or actually get an increase.”

So, no disagreement there.

What happened to Citylink is nothing to do with the actions of unions or union activity. It has everything to do with Better Capital and how, and why, it runs.

Re: City Link goes bust
 

The RMT seem to be in cloud cuckoo land on this one.

I certainly agree the timing was cynical as hell, however I've no idea what they think a 'political and industrial fight' can accomplish in these unfortunate circumstances.

Clearly the owners took the cash from the busiest time of the year and then wound up the company, however this isn't abnormal practice in any company and it's required of them to try and get as much 'value' out of the business as possible.

Sadly this doesn't even come close to coinciding with what's best for the staff, however I have to feel that Mick Cash is blustering away about how he won't tolerate any delay in his demands to talk to a cabinet minister and is playing politics of his own - as he would have to in these circumstances. To do anything less would harm the RMT's reputation.

Re: City Link goes bust
 

This is particularly interesting:

“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."

Re: City Link goes bust
 

Well of course there were - extract maximum cash from the busy Christmas season before putting the company into administration. I'm not sure what he's expecting government to do about it though.

Short of a taxpayer bailout which I'm hugely against it's definitely tragic but no laws seem to have been broken and the company is now being wound up in the legally prescribed manner.

Re: City Link goes bust
 

Nor am I.

I suspect the RMT concerns go further, and deeper, than compliance with company administration regulations.

Take for example the City Link press release of 11 November to see that a very different picture to what we now know to be the reality was being painted.

By any standard it reads of a glowing, burgeoning, successful company expanding and recruiting many hundreds of new employees and sub contractors. I suspect there may be questions to be answered from a Business Secretary perspective in relation to the message it will have sent to staff, customers and, ultimately, shareholders.

Still, let's consider the human damage caused. Nobody likes or wants to lose their job.

Re: City Link goes bust
 

Companies who have huge seasonal spikes in demand and don't invest in capacity for them die even more quickly than companies who do. You'll note not a single mention of permanent staff there, all temporary, and it looks as though they are referring to delivery performance, not financial.

It's a press release. Companies that announce before their biggest part of the year that they are burning cash faster than a coked up banker or that they have no intention of uplifting their capacity to service customers tend to lose business :)

This seems to go along with what I said earlier. They ramped up, have taken the cash from the peak demand period and after this period is done have begun winding the company up. I'm sure had it been Christmas more often than once a year the finances would have been different.

They would, no question, have been planning to wind the company up on Christmas Eve for a while.

Sadly the company had been burning cash for a while, hence their sale for £1 and their burning through a £40 million cash injection.

It's a real shame; they are casualties of an industry that has rushed, headlong, towards the bottom.

Re: City Link goes bust
 

I was told over a year ago by a driver for Yodel his job was under threat as the business wasnt doing very well but still they are around.

I used to work for Citylink years ago and they were an awful business to work for. They would send us to businesses for example to deliver parcels knowing they wouldnt be open yet and if the companies would ring in when we left a tried calling card they were treated very badly over the phone.

I was glad to have found a job elsewhere and was only with them about 18 months.

Re: City Link goes bust
 

Without seeking to be disingenious I understand perfectly well how seasonal supply and demand works from both a resource and perfomance basis, thanks.

Where does it say all the staff being recruited will be temporary? Sorry if I've missed it.

Yes, agreed, it is a real shame but the fact is it wasn't mismanaged into administration by the staff on the ground who, as always, are the ones to suffer most.

Re: City Link goes bust
 

Yeah right.

They bought a loss making company, or rather were "given" a loss making company, and 12 months later they still had a loss making company.

Attempts they made to restructure the business to make it not so loss making were fought by the union.

So now it is no more, only thing at fault here is the freemarket economy.

---------- Post added at 14:10 ---------- Previous post was at 13:50 ----------

Duh, it's PR, clue is in the fact it was written by a PR company.

It's basically an advertisement. And would probably feature as a faux news item in many trade publications

It's written to show prospective customers that City Link is all systems go to ensure that they can handle your business this year.

Obviously it didn't have the desired effect.

What would you advise then to do, put out a statement advising that things are looking a bit dodgy this year, so I would risk using us to handle you business. - we could go pop at any moment.

Re: City Link goes bust
 

There you have it. In my book the unions are still fighting for caps on the heads and shoes on the feet of the downtrodden workers. If the unions have resisted restructuring, they are to blame for the downfall.

Re: City Link goes bust
 

Playing the blame game helps nobody. I just hope that the workforce don't get shafted any further..:(

Re: City Link goes bust
 

You never know, Yodel might swoop in and buy them out. :D

Re: City Link goes bust
 

We might have to wait a few more days for delivery though.

Re: City Link goes bust
 

Well, then - you should have come in on Mr Angry's contrary point.

Re: City Link goes bust
 

I appreciate your opinion on the matter but I note that you've introduced a very big "if" into the equation.

The RMT were forced to withdraw the threat of industrial action in Sepember 2013 due to a court ruling. I'm not aware of their having threatened any further industrial action or work to rule since then. I am happy to be corrected if they have.

The RMT actually positively encouraged its membership to sign the new City Link contracts.

What we do know as having happened since then is that according to their news feeds / press articles in January of this year that during the Christmas period of 2013 they as a company performed exceptionally well and were showing signs of turning the company around through better IT systems and and the much lauded Better Capital investment.

Indeed one would have to wonder who knew what given the fact that they were up until the appintment of administrators still advertizing "permanent" job posts with a closing date of December 31st 2014 for applications.

Several financial sites have for the past year cited potential risks and frailties facing the Better Capital investment programme for not only City Link but other acquisitions (hence Better Capital II being launched).

That aside, there is a human tragedy in all of this and petty point scoring serves little purpose other than to expose certain bigotries.

Let's think of those who've lost their livelihoods - particularly at a time of year where there is historically enough financial hardship to be faced.

Re: City Link goes bust
 

Quite. :tu:

Re: City Link goes bust
 

Given the article is about how City Link plan on handling Christmas it seems reasonable to think that the staff surrounding these temporary delivery drivers will, likewise, be temporary else the mismanagement runs even deeper than any of us could've imagined. Hiring 1168 agency / subcontractors to handle the Christmas rush and supporting them with a few hundred new permanent warehouse based staff would be very odd.

The PR blurb even mentions 'using' 14 more forklifts and 963 more hand-held scanners, not 'purchasing', 'investing in', or whatever else. Sounds like these were leased too.

Either way a delivery company isn't going to increase its workforce by 50% in permanent staff to cover Christmas, the total permanent workforce was less than 3,000.

Re: City Link goes bust
 

Possibly just doing their utmost to show they weren't in as much trouble as the industry rumours might have suggested. To admit they were in serious trouble would have made their failure inevitable and sooner than was the case.

Re: City Link goes bust
 

It may seem "reasonable to think" yes, but it is not exclusively factual.

Re: City Link goes bust
 

No we don't, that's another PR press release and not independant assessment or a record of accounts.

That article means sod all
What, a job for "self employed" delivery driver....................?

That's not a " permanent" job.

That's basically a contracted out position to a self employed courier.

There's nothing that shows that the company was is any way turning a corner or being anything other than a loss making money pit.

Re: City Link goes bust
 

I can't see where "petty point scoring" has taken place. I've detected and argued against a stance from your statement: “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."

It's pretty pointless commiserating with "human tragedy" without considering practical ways of avoiding it. To make a profit, enough customers must pay enough money for a well delivered service. An analysis of this aspect would be more beneficial than the RMT's line of "cynical motives".

My analysis is entirely clinical and nothing to do with point scoring. BTW I have worked in the logistics industry and know both Yodel & DHL reasonably well.

Re: City Link goes bust
 

I take your points entirely, sir. And, as I said, I appreciate your opinion.

Best we wait and see what comes out in the wash.

Happy new year to you & yours.

Re: City Link goes bust
 

And the same to you and yours.

Re: City Link goes bust
 

No, but the balance of probabilities would strongly suggest it's the case as anything else would be suicidal. We're splitting hairs a tad here. They don't appear to have been advertising for permanent staff, your advertisement is for self-employed hence employed purely at the company's convenience with about as much job security as the average employee in the USA. The delivery drivers discussed in the PR blurb, at least, were precisely 0% permanent, all agency / subcontracted.

Regardless I don't agree with many that unions were entirely to blame, however it doesn't change that CityLink were loss-making and all indications are that their costs were too high given their market place. Whether unions could have done more to accommodate the demands of management or not is by-the-by.

I'm purely interested in the timing of the announcement. It seems abundantly clear that they were a casualty of an industry engaged in a race to the bottom where self-employed drivers using their own vehicles are increasingly common.

Blame their customers, the retailers, and in turn us for demanding free delivery if we pay over £x and being happy just to whinge when a delivery from a disinterested, self-employed driver goes pearshaped rather than paying more for higher quality service.

---------- Post added at 17:15 ---------- Previous post was at 17:14 ----------

This indeed - it could quite easily be a part of an accounting scheme to acquire losses for tax purposes. :)

Re: City Link goes bust
 

I agree, we are splitting hairs - but they are important hairs.

The supposed permanancy of the advertized posts was particularly why I put the word "permanent" in quotation marks in my reference / link to same.

I couldn't agree more with everything else you've said. "Race to the bottom" pretty much sums it up.

Happy humanist new year to you & yours.

Re: City Link goes bust
 

Haha! Thank you, but careful talking like that you'll upset the PM with his sudden new-found devoutness.

Re: City Link goes bust
 

You can't be permanent if you are a " self employed" driver, as you don't work for city link you work for yourself.

That's obviously an error in the advertisement

Re: City Link goes bust
 

A bit of an update from the Guardian.

"Job losses from the collapse of City Link could rise to more than 4,000 after it emerged that the parcel delivery firm partly relied on a 1,000-strong army of self-employed van drivers and agency workers."

"RMT’s general secretary, Mick Cash, called for an official investigation into both the timing of the appointment of administrators and allegations that City Link may have been restructured prior to its collapse, moving “valuable property assets out into a separate company”. The union says the holiday period could hinder a rescue plan."

"Moulton dismissed the RMT’s claims, telling the Guardian: “If this is an asset strip, it is an extremely poor one because we will have lost a lot of money.” Better Capital has already written down its £40m investment in City Link to £20m."

"Last month there was little sign of City Link’s mounting financial problems, with its website saying it had “got all its plans in place to deliver an even more successful peak to last year’s winning performance”. Liam Tucker, its operations director, who joined in September, said: “City Link had one of its most successful peak periods in 2013 and we are looking forward to an even busier and more successful one in 2014.”

"Clearly something does not add up when we consider the phenomenal growth of ecommerce and the demand on UK supply chain, yet an established distributor has gone out of business,” said Patrick Gallagher, chief executive of rival carrier CitySprint."

This could get very interesting.

Re: City Link goes bust
 

Many years ago, l applied for a job,when they had vacancies. There basic wage was 15.000 a year. So l feel sorry for the drivers.

The union are there for a reason to PROTECT the worker. To me some employers treat there staff like carp. Look what's happened here. The must have known weeks ago, this was going to happen. What a day to decide - disgraceful

Re: City Link goes bust
 

Big high five then Arthur, they did a great job for City Links staff.

Re: City Link goes bust
 

Bit of a cheap dig..how can any union do anything if the management call in administration during a holiday season?

Re: City Link goes bust
 

Not a cheap dig at all Maggie. I lost my job 20 years ago when the business I was working in went bust. The union at the time told us to join them and we would be ok. So I did, paid my subs, guess what, the business still went bust.

My view changed forever after that, people may put their rose tinted spectacles on but unions are a business, they take your money and promise the world, when actually if a business pulls the plug, the unions can do nothing about it apart from getting their PR department to push out a load of garbage to minimise the impact,on themselves , so people keep on funding,them.

Folks,should google,where union leaders live, says it all really

Re: City Link goes bust
 

Ah, that age old tactic. See, what you do is change the terms and conditions for new staff to be worse than the existing staff and after a certain period you then have a lot of staff on the new terms (depends on how high your turnover is) and you then claim that it's 'unfair' that staff are on different terms/pay than others. Conveniently ignoring the fact you made it unfair yourself, you move the blame onto the people with the better T&C's as it's obviously their fault and they are the fat cats with the better pay and pensions.

This then becomes your platform to whittle away at everyone's pay and conditions, all in the name of fairness. If you can make the people with the worse conditions slightly better off while still also reducing the overall cost then the workforce will do the job for you.

City Link had another, rhyming name, but it would breach the forum rules.

Re: City Link goes bust
 

That was more than a year ago.
That situation tends to arise when another business is taken over and absorbed into the parent company.

Re: City Link goes bust
 

Well, this is sad all round, but shows that it depends on your viewpoint when you say this is "cynical timing" or not.

City Link have been burning money for years. The writing was on the wall last year when Rentokil Initial gave up on them and this "Better Capital" fund bought them.

These turnaround companies have a very hit and miss recond, not because they are inherantly good or bad, but because even due diligence fails to show how bad a company might be. On the face of it, City Link could've been turned around. After all it was operating in an expanding market, with a decent reliable network and a well known brand.

Alas, it was not to be, much like what happened to Comet in remark similar circumstances. The opposite story can be found in GAME which WAS turned around, brilliantly.

Yes, the timing was obviously planned. Better Capital have lost shed loads on this, and didn't want to lose any more. The moment Christmas was over they would be back to bleeding money so they called time, which is fair enough. bad timing but anyone working there who didn't see this coming didn't have their eyes open.

Nobody wins in cases like this. Turnaround companies do a lot better when the companies they take over actually make a profit! Tax deductibles don't pay for millions back that they lost, nor do they keep jobs viable. They do work for bigger companies with divisions who don't seem to work (Hello Sony!) and have the rest of the company pay their way, however. That generally only works if the company continues trading, however.

Re: City Link goes bust
 

Surely it's all planned by nasty business men to kick the down trodden workforce in the teeth. surely the venture capitalist fat cats have taken the money out of the employees wallets and the food out of the families mouths.

Re: City Link goes bust
 

Just goes to you. The guy who owns City Link is a multi millionaire, pumps money into Cameron 's pocket, that Sam's it all.
The biggest problem is the worker, works all hours (like l did) and they treat you like carp.
My wife nearly got killed in a car crash, my boss insisted that l had to go to work. This is what companies are like - its just money to them.
The owner if City Link is probably on a yacht somewhere

Re: City Link goes bust
 

I know you're taking the mickey, but the best capitalists are the ones who have thriving, profitable businesses with happy workforces.

You only get so far by asset stripping and running, it's not sustainable for a start and doesn't produce ROI in any way the same level as actually running a business well.
No, they really aren't, not all of them.

Those who produce a sustainable business model, provides for a sustained business. I'm proud to work for a company that values the contribution all workers make. Without them there is no business, and the best businessmen are ones who see their workers as people to make money with, not from.

Re: City Link goes bust
 

It looks like it'll be the taxpayer who will be responsible for the redundancy payments under the statutory redundancy payments scheme.

http://www.bbc.co.uk/news/business-30621884

Re: City Link goes bust
 

A brilliant metaphor and so very, very true. We are all treated like oily fish in a big fish pond. You did mean that didn't you Arthur? :)

Re: City Link goes bust
 

Actually, Arthur, he 'pumps money' into Nigel's pocket, as he is a UKIP supporter....

Re: City Link goes bust
 

Arthur thinks that posting the word crap is offensive..leave him be.He's trying to be a gentleman.

Re: City Link goes bust
 

The directors would be criminally responsible if they acted anything other than prudently. Once they know that they cannot pay their bills, they must not knowingly incur more debt and that includes wages.

This Christmas/season stuff is pure emotion and not a valid criticism of the directors, IMO.

---------- Post added at 12:21 ---------- Previous post was at 12:17 ----------

That's a subjective statement and not the general case. I can make a subjective statement too. My boss was quite happy for me to work at home after a minor operation (I'm a contractor). I hope that boss is abnle to relax on a yacht somewhere.

Re: City Link goes bust
 

When did morality become a dirty word in capitalism?All I can say is that a company that treats it's workers like crap will get workers that aren't worth a damn and they are bound to fail..Whereas all those companies that treat their workers as being worthwhile tend to thrive.Seems to me that the owners didn't want City Link to thrive.

Re: City Link goes bust
 

Actually, they lost money on it - when they decided not to pump more money into it, it became insolvent, and by law, they had to declare it and call in the administrators.

Re: City Link goes bust
 

A lot of people have lost sight that City Link was sold by it's previous owners Rentokil to Better Capital back in April 2013 for the nominal sum of £1 (you can't sell something for absolutely nothing). That indicates to me that even back in 2013 the company was not viable.

Re: City Link goes bust
 

Then blame Rentokil Initial for that. The company has been burning money for over 5 years. It was taken over by a company who thought they could turn it around, it couldn't. Better Capital bought a house of cards, they may not have done enough to save it, but it wasn't them that caused them to collapse.

Re: City Link goes bust
 

:tu:

Re: City Link goes bust
 

The end result is that we as taxpayers get to sort out the workers one way or another...and we didn't cause the problems in the first place..As for due diligence I thought it was a crime to misrepresent how well a company is doing to any company thinking of buying it..If it isn't it's well past time it was and well past time any regulators did something about it.

Re: City Link goes bust
 

Actually, the NI Fund (where the statutory redundancy payments come from in cases of insolvency) is funded by employees and employers contributions.

Re: City Link goes bust
 

It is indeed.

Making announcements

The FSA’s Disclosure and Transparency Rules oblige directors to make certain announcements to avoid the creation of a false market in the company’s shares. Similar rules apply in the case of AIM companies. Bad news, in other words, cannot be kept hidden.

Announcing that a dividend might not be paid on a listed preference share, or that a company is in discussion with its bankers, will obviously have a marked effect on creditor confidence, and directors will need to consult their advisers about the timing of announcements.

They must, however, never lose sight of the fact that they can be guilty of a criminal offence if they:

• make any statement, promise or forecast they know to be materially misleading, false or deceptive;
• recklessly make (dishonestly or otherwise) any statement, promise or forecast that is materially misleading, false or deceptive;
• dishonestly conceal any material facts.

In each of these cases, directors will be guilty if they deliberately induced another person to deal in securities in a company on the basis of false information – or they were careless about what they said and its effect on investor behaviour. (See our series of guides on The FSA and Securities Regulation.)

From here

Re: City Link goes bust
 

I don't think anything was misrepresented. They knew they where being given a pup. They though they might be able to turn it around but they couldn't.

If it hadn't been for the venture capitalists, the workforce would most likely have been redundant by Easter, not christmas.

They gave it a go and failed. But they gave it a go.

Some on here would have you think they engineered the whole thing, nasty business men...

Re: City Link goes bust
 

You are stretching things somewhat.

Re: City Link goes bust
 

It's called enterprise and thankfully enough succeed to keep the millions they employ (the majority of the UK's workforce) in work.

Re: City Link goes bust
 

That isn't what I meant.

Facts and figures only tell part of the story. You only know if a company is merely a potentially great company that has been run badly or just a company doomed to fail once you take the reins. Balance sheets, financial figures and reports can not tell you the potential of the workforce, the goodwill of a company and just how lucky they have or have not been.

Nothing was mis-represented here. City Link was sold as a "Fixer-upper" and clearly it couldn't be fixed. No need for any new regulations, just a reminder that not all companies can be turned around.

Re: City Link goes bust
 

Three City Link directors to face criminal charges over firm's collapse.

http://www.theguardian.com/business/...livery-company