Technology investment 'could have saved Amtrak'
West Midland-based parcel delivery firm Amtrak could have saved itself from collapse had it been more willing to invest in the latest technology, its former chief information officer has claimed.
The move comes as ex-employees of the firm announced they are taking legal advice over the way they were sacked.
Four hundred people lost their jobs last week when the company’s Aldridge head office and distribution hub was forced to shutdown after administrators failed to secure a buyer for the business.
An additional 500 staff were also made redundant when the company’s other 36 depots around the UK were closed.
Closure was blamed on high costs and the continued credit crunch.
One former employee, who declined to be named, said there was concern among his former colleagues about the circumstances surrounding their departure.
“We are concerned about reports that [rival courier] Business Post have obtained their [Amtrak] customer data base, which could constitute a transfer of business.
“If this is the case, the employees also have a right of transfer to Business Post under the law of Transfer of Undertaking (TUPE),” he said.
He added there were rumours that Business Post rival City Link had also been offered for sale Amtrak’s list of clients.
City Link, a division of support services Rentokil Initial, has not enjoyed the best of times itself recently. Last month, Rentokil announced that the delivery business had seen a near six per cent drop in first half revenues compared with the same period last year, although it added that the division was now making progress towards restoring customer levels.
Business Post has declined to comment on the situation.
Meanwhile, further criticism has been heaped on Amtrak by its former CIO Phil Young.
Mr Young, who is originally from Birmingham and was awarded CIO Innovator of the Year while at the firm, said the business could have survived the credit crunch had it been willing to let technology take more of a centre stage and secure its future as a leading UK home delivery provider.
He claimed that company had not failed due to bad management or poor ownership but largely because of the “laws of business economics”.
Mr Young, who left Amtrak in March 2007, said he believed that had the company invested in technology earlier in order to help reduce overheads, then it may have been able to ride out the economic downturn without the need to rely on the bank extending its credit facilities.
He said the firm would have been better served had it moved to a model based around the growth in home internet shopping rather than account-based trading.
“Amtrak had the potential to secure their position as a real player in this space,” he said.
Mr Young, who now has his own consulting business and has published a book about his experiences in business, said he had left the business because of the lack of investment in new technology.
“Technology was not seen as a key investment at the time, instead it was seen as a cost. Whilst it is a sad day and a lesson learnt too late for Amtrak, it sends a warning out to others that they must embrace the changing nature of the marketplace if they are to survive,” he added.