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JOSEPH JOHNSON / Things
Red Bus has sold its urban transport business to Christchurch-based Ritchies Transport.
Sixty-three people will lose their jobs as the Christchurch taxpayer-owned Red Bus bus company is sold.
Local company Ritchies Transport bought the business for an undisclosed sum, the companies announced Wednesday.
The future of Red Bus has been uncertain since February when Environment Canterbury announced that it had awarded six of Red Bus’s 11 urban routes and their school contracts to other companies.
The sale includes the remaining five urban Red Bus routes and 52 buses.
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Red Bus CEO Tony King said the majority of the staff, 145, would move to Ritchies, but 63 jobs would be lost.
He said the workforce had known since February that the company would have to downsize as a result of lost routes and that a large number of staff had left. The company had hired temporary employees to fill the gaps until its existing contracts expire on November 29.
The majority of the 63 jobs that are terminated are temporary or fixed-term employees or individuals who make voluntary redundancies.
“Many of the lost jobs at Red Bus have been replaced by new jobs and operators are taking over the routes previously operated by Red Bus.”
JOSEPH JOHNSON / THINGS
Red Bus has lost the award contracts for three large urban bus units, which comprise 13 routes, including the orbiter, orange and blue lines. (Video first posted on February 27, 2020)
Red Bus Ltd posted a loss of $ 5.3 million last year and is the worst performing trading company owned by the Christchurch City Council through its Christchurch City Holdings Ltd (CCHL) business division.
In May, the city council paved the way for the sale of Red Bus and since then the company has been considering whether to continue operating as a smaller company, sell or liquidate.
King said the decision to sell provided the best value of those three options.
Christchurch City Councilor James Gough said he understood that asset sales could be a sensitive issue within the community, but that it was a “liability sale.”
“I think it was the logical move.”
Cr Sam MacDonald said the decision to sell was the right one.
“It’s one of those realities when you have a company that loses contracts, we have to protect taxpayers’ money. It’s pretty clear that this is the most efficient way to do it. “
Red Bus was created in 1991 and some of the staff have worked there since its inception.
King praised the staff who during the long period of uncertainty had maintained the level of service for which the company was known.
He said he was delighted that a local Christchurch-based company had emerged as the successful buyer after a very competitive sales process.
“The Ritchies are a long-standing company for which urban transport is their core business. We believe they will be an excellent and committed owner for the business. “
Ritchies CEO Glenn Ritchie said the Red Bus business is a great fit and he is pleased to be able to expand the company’s existing operations in Christchurch.
The sale was expected to be completed in early December following route changes in late November.
Former Red Bus CEO of 14 years, Paul McNoe, resigned in May along with CFO Terry Foote.
