A MORPETH business has fallen victim to the recession after 30 years of trading.
RS Johnson, based in Coopies Lane, has been forced to fold after a dramatic drop in custom and the loss of major contracts to bigger competitors in Newcastle.
Owner Steven Johnson, who built up the garage business from scratch, closed its doors two weeks ago, putting about 20 staff out of work. He said he has been forced to call in receivers and Robson Laidler is dealing with the administration.
However, some workers have hit out at the handling of the closure, which came three days before pay day.
Derek Saint, who worked for the company for seven years as a recovery driver, said: “I didn’t even get a phone call or a message to say it was closing, I heard through a third party that we had lost our jobs.
“I might lose my house, never mind anything else. I’m owed a month’s wages and two months’ overtime pay, that is before we think about redundancy payment. It is looking like I’ll end up with nothing at the moment.
“I was told the receivers are in and dealing with it, but I have spoken to the insolvency agency twice and they don’t know anything about it.
“If it is registered insolvent I can claim money from the Government, but I can’t claim anything yet.”
Another person, who did not wish to be named, but says they have an interest in the business, said: “Three days before the lads were due to be paid the place is shut up and nobody is paid. People have mortgages and families, it is not right.
“This has left people in the lurch.”
However, Mr Johnson says he was left with no choice but to close the business and insists that all workers will be paid through the formal process.
“Everything is going through the receivers. These people will get paid, but it will be going through the normal system,” he said.
“The bank closed our account so I couldn’t physically pay anybody, but I am working with the administrators to sort that out as quickly as I can so that people do get paid.
“I personally am the biggest creditor of the company for the cash I put in to try to keep it afloat. I put a considerable amount of money into the business two years ago to try to keep it going, but from January the work has just gone and I couldn’t sustain it any longer.”
He added: “I appreciate the staff. I employed some of them for eight, 10 or even 20 years and the loyal staff are still supporting me. Out of 20 staff, only two have given me any grief over this.
“I have shaken most of them by the hand and wished them well. A lot of them have got other jobs and I have put a good word in for them where I can. Some have gone to work for my competitors.”
The company began trading in 1981, initially specialising in the service and repair of four wheel drive vehicles before branching out into vehicle recovery in 1985.
Other services, such as vehicle hire and body repairs, were added and it operated from two centres in Morpeth and Blyth. Just four years ago turnover was more than £2million and 30 staff were employed, but when the recession hit the business dried up. Mr Johnson, who lives in Morpeth, said: “Work just disappeared.
“Our business relies on people travelling and breaking down, but people aren’t doing that any more. The petrol prices are so high and you just have to look at the roads to see how quiet they are, the traffic just isn’t there. That is what I put a lot of the problems down to.
“We have a body shop and the work reduced dramatically there and it also reduced dramatically on the roadside. We also lost a big contract that caused us a lot of problems.
“The turnover has dropped by about 40 per cent since Christmas.
“I was desperately trying to keep going, but I just couldn’t see how there was any way out of it in the end. I had no money left to try to get it afloat again.
“Thirty years I have been in business and I have been through recession before, but nothing like this. This is the worst I have ever known it.”
The 55-year-old is now trying to find work for himself, but says he has lost the appetite to run a major enterprise with staff.
“People have no comprehension of what it is like to go through something like this, this is the worst thing I have ever gone through,” he said.
“The customers have been great and the regulars are very disappointed because we did provide a good service.
“We provided a service to keep people running around and people would often see our vehicles, but it is all finished now.”