City Link goes bust

[Ignitionnet]

Originally Posted by Mr Angry

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."

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.

[Mr Angry]

Originally Posted by Ignitionnet

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.

Nor am I.

Originally Posted by Ignitionnet

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.

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.

[Ignitionnet]

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.

[alanbjames]

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.

[Mr Angry]

Originally Posted by Ignitionnet

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.

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.

[Pierre]

Originally Posted by Mr Angry

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.

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 ----------

Originally Posted by Mr Angry

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.

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.

[Sephiroth]

Originally Posted by Pierre

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.

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.

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

[v0id]

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

[denphone]

Originally Posted by v0id

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

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

[Sephiroth]

Originally Posted by Maggy J

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

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

[Mr Angry]

Originally Posted by Sephiroth

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.

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.

[Osem]

Originally Posted by Pierre

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.

Quite.

[Ignitionnet]

Originally Posted by Mr Angry

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

To ensure that Christmas deliveries run smoothly this year City Link is adding an extra 1168 fleet collection and delivery drivers to its workforce to handle peak collections – 433 agency drivers and 735 subcontractors

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.

[Osem]

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.