9 Jul 2014

Takeover too much for freight company

10:52 pm on 9 July 2014

The receivers of freight company Bullet Freight Systems say the company's takeover of another freight business caused major financial problems.

Bullet Freight, which has seven depots throughout New Zealand, went into receivership on 4 July and folded completely on Tuesday, with the loss of 197 jobs.

A Bullet Freight Systems truck.

Photo: Bullet Freight Systems

The company acquired Wellington-based Strait Freight last year. David Webb, managing partner of receivers PPB Advisory, told Radio New Zealand's Checkpoint programme on Wednesday that created some major issues.

"It's been widely reported that the merger of the two businesses, Bullet Freight and Strait Freight, had created issues for management, the merging of the cultures and also the different operations. It was a bigger operation for the owners to deal with."

Mr Webb said he spoke to more than 50 parties about buying the company.

First Union organiser Rudd Hughes said most workers' contracts had no redundancy provision. The jobs lost were not high-paying ones, which meant workers were living pay day to pay day.

"It's a terrible time for these workers. They've had very little opportunity to plan for the future," he said.

"The company has kept them in the dark about the financial situation and the union is going to try and do as much as we can to help these people."

The union would contact other freight companies in an effort to find other jobs for those laid off, he said.