Waterford Wedgwood: A shattering day for iconic firm
Published 06/01/2009 | 00:00
A desperate battle is underway to save 800 jobs at one of Ireland’s most iconic companies after Waterford Crystal confirmed it has gone into receivership.
Waterford Wedgwood, Waterford Crystal’s parent, was placed in receivership after the firm formally requested suspension of trading in its shares on the Irish stock market.
The company last night blamed “total mayhem” on global markets for the dramatic downturn in its fortunes as it emerged the firm recorded a pre-tax loss of €63m in the six months to last October.
David Carson of Deloitte (Ireland) was appointed as receiver. Negotiations will begin immediately to try and sell the company as a going concern, which will allow it to continue trading.
Mr Carson is the receiver for Waterford Wedgwood plc in Ireland. Joint administrators will now be appointed for the UK-based sister companies.
The luxury goods firm currently employs 800 people in the Republic and 1,900 in the UK through sister businesses, Wedgwood and Royal Doulton.
The Irish government last night signalled it will do whatever it can to ensure the prestigious Waterford Crystal brand remains in Ireland.
TD and Cabinet Minister Martin Cullen expressed shock at the announcement — but said he was hopeful a buyer could be found for one of Ireland’s most iconic brands.
However, the government will not revisit their decision to decline to provide a State capital injection for the ailing firm.
Waterford TD Brendan Kenneally (FF) said Tanaiste Mary Coughlan was monitoring the situation closely and he expressed optimism that a buyer will come forward for the crystal division.
“I have been speaking to (Tanaiste) Mary Coughlan about it and she is well aware of the situation,” he said.
“There are efforts ongoing in talking to the banks involved and I know there are others out there who perhaps might have an interest in particular in buying the crystal division. Perhaps with a receiver in there he might decide to float off the crystal division and sell it as a going concern,” he said.
Former Waterford Wedgwood chief executive, Redmond O’Donoghue, last night said no-one could have predicted the chaos that would continue to grip their core trading markets.
The firm needed to raise around €150m to fund a sweeping restructuring plan. But, largely as a result of the ongoing crisis, the company was only able to raise 50% of the amount required.
The situation was further exacerbated by the soaring value of the Euro against Sterling and the US dollar, which hit their crucial trading margins.
Waterford Wedgwood chief executive David Sculley said he was very disappointed at the move into receivership.
“I am disappointed that certain of the group’s UK and Irish subsidiaries have had to go into administration and receivership, but we remain optimistic that discussions will result in a buyer being found,” he said.
All Irish and UK operations will continue to trade as normal — though trade unions last night expressed fears about the implications for the firm’s 800 Irish jobs.
Trade union officials met with management in Waterford yesterday for a briefing on the receivership move, and the work- force were later updated by the receiver who said production would continue as normal.
However, one trade union, UNITE, admitted the future remains deeply worrying. Workers leaving the Kilbarry plant in Waterford yesterday expressed shock at the dramatic downturn in the company’s fortunes. Many admitted they feared for their jobs.
“Twenty years ago a job here was one of the best in Ireland. Now none of us know what the future holds. It’s shocking, absolutely shocking,” one man told the Irish Independent.
Another worker, Donie Fell, said everyone hoped the high-profile Waterford Crystal brand would attract a new investor.
“The receiver outlined the plan of action — but there is no time limit on it,” he said.
“It (Waterford) is a global brand, it is a good brand and they will try and sort out now what is going to happen with it.”
The grim news came just three months after the firm sought 280 redundancies as part of a plan that axed large-scale crystal manufacture at their famous Waterford plant.
Crystal manufacturing in Waterford can be traced back to 1783 — but the modern Waterford Crystal firm dates from 1947.
By the 1960s, Waterford Crystal had established itself as one of the world’s leading consumer brands. In the 1980s it merged with British pottery firm, Wedgwood to become a dominant player on the ‘prestige goods’ market.
However, growing competition on core markets, exchange rate fluctuations and spiralling production costs led Waterford to gradually reduce its Irish manufacturing capacity. In the early 1980s, Waterford boasted an Irish workforce of more than 3,000.
In 2005, the firm axed their Dungarvan crystal plant with the loss of almost 500 jobs. Some production was consolidated at the Kilbarry plant in Waterford city, and the rest was moved overseas.
Two years later the firm sought a further 490 redundancies after what it blamed difficult trading and currency conditions on their core markets.
Last October, Waterford sought a further 280 redundancies — effectively marking the end of their large scale crystal manufacturing operation in Ireland.
That plan had envisaged that Waterford would retain just 200 Irish jobs, 70 in direct crystal manufacturing, 55 in the popular gallery and tourist trail as well as 75 in sales, administration, plant security and maintenance.
How Waterford's cracks emerged
Waterford Crystal was once the glittering star of Irish business with traditional hand-blown glass and fine lead crystal sold around the world.
Its success defied the recession-hit 1980s, but questionable business plans have seen management turn to cheaper overseas labour, abandoning homegrown skills.
Despite several attempts to reinvent the brand, the demise of its Irish factories has been flagged for at least 10 years.
1987 An internationally successful Waterford Crystal has three plants in the south-east, at its height employing 3,500 staff. Despite strong sales, management push for a takeover of Wedgwood and put 750 workers on redundancy notice.
1988 The company |invests in specialist cutting machines |instead of the traditional hand-blown glass craftsmanship and offer attractive redundancy |packages.
1990 Serious questions are asked about business plans after hundreds of workers take redundancy, only for the company to reinstate 100 experienced glass cutters to meet demand. Later that year the outlook takes a nose dive. Unions and management endure a 14-week dispute over work practices.
1993 Management asks workers to take a 25% pay cut and threatens the first factory closure.
1994 The Butlerstown plant shuts and new production technology |is introduced into the other factories.
1997 The visitor centres expands and designer John Rocha is brought in to revamp the brand.
2000 The business steadies through the late 1990s and the Millennium brings a timely boost with new, popular designs putting it on a strong financial footing.
2002 The success fades and management look to restructure through voluntary redundancies.
2005 Dungarvan closes with the loss of 400 jobs and management again strive to make crystal fashionable as designer Jasper Conran signs on to create new styles.
2007 In February, revered fashion |designer Marc Jacobs designs a new range as the company aims at young buyers.
Just over six months later 490 jobs are axed at Kilbarry on the basis that 500 other posts can be saved. Two hundred redundancies are not taken up but manufacturing moves to Slovenia.
2008 The Irish government rejects a request from the company in May to underwrite an emergency €39m (£30m) bank loan to secure its future. The share price is worth virtually nothing on the Dublin stock exchange. Six months and 30 meetings with potential investors later, a fundraising drive nets just €79m (£54m) and the company moves to end production in Ireland. In December, parent company Waterford Wedgwood de-lists from the London stock exchange amid fears its days are numbered.
A legend in ceramics
Much has changed for Wedgwood since its founder, Josiah Wedgwood, toured his Stoke-on-Trent workshop in the late 1700s, often smashing vessels which failed to meet his high standards.
Since the company was purchased by Waterford Glass Group in 1986, the china firm endured tough times as formal dining trends gave way to more relaxed habits and cheaper competitors.
Six years of losses drove Wedgwood to move all major ceramics production from Barlaston, to the industrial outskirts of Jakarta, Indonesia.
In Stoke-on-Trent, where Mr Wedgwood turned the family business into a global pottery enterprise, the founder’s statue still welcomes visitors arriving by train.
Wedgwood bone china tableware graced the tables of many illustrious homes throughout the world, including the dinner service which President Theodore Roosevelt ordered for the White House.
During the 1930s, Wedgwood’s success continued and in order to increase efficiency, the fifth Josiah Wedgwood decided to build a new factory near the village of Barlaston.