Shop stewards at Waterford Crystal were in intense discussions at time of going to press on Tuesday night to establish whether redundancy terms agreed last October were in jeopardy, following the shock news on Monday that parent company Waterford Wedgwood had entered into receivership.
This and the future of the worker’s pension scheme were foremost in the concerns of many Waterford Crystal employees, as Monday’s devastating news sank in. The world-famous Kilbarry plant currently employs about 800 people and many households in the locality would have more than one family member working at Waterford Crystal.
Receiver David Carson, of Irish firm Deloitte, and his team are understood to be in discussions with three US parties who are interested in parts of the collapsed crystal and china maker. Appointed by the company’s bankers, led by Bank of America, last weekend after the collapse of talks over a possible sale to a US private equity firm, Mr Carson has told the 800 or so workers at Kilbarry he will do all in his power to sell the company as a going concern. However the failure of the board, led by Sir Anthony O’Reilly, to secure a buyer over the past month makes its re-emergence from receivership as a going concern in its current form unlikely.
The death knell sounded for Waterford Crystal last October, when workers were told of plans to lay off 280 people at Kilbarry, effectively ending large-scale manufacturing at the plant. This followed an earlier announcement in 2007 to seek 490 redundancies at the factory in a restructuring move.
In recent years the Companies benefited from significant shareholder support as exhaustive efforts were made by the management team to restructure the businesses. However, as trading conditions deteriorated, it became apparent that a restructuring of the businesses could not be achieved in an acceptable timescale. Consequently, management began looking at the alternative strategy of trying to find a buyer for the businesses which would also have involved a comprehensive financial restructuring. While considerable progress was made, no firm offer was secured and debts stood at €448.9 million at the time of its most recent results in October. The company was told in the summer by its bankers that it had to raise €150 million to finance working capital.
Sir Anthony last night resigned with immediate effect as chairman. He was joined by his wife, former chief executive Redmond O’Donoghue and Patrick Molloy. O’Reilly and his brother- in-law, Peter Goulandris, have invested around €400m in the flailing luxury goods operation last four to five years, including €60m a few weeks ago. If the company is sold, O’Reilly and Goulandris are unlikely to recoup their investment.
The Government met with company representatives on Monday night to seek a way to minimise job losses from the failed Kilbarry plant. It is understood, however, that nationalisation has been ruled out because of the massive cash injection that would be needed at a time when the public finances are in chaos. Wedgwood were refused a €39m loan guarantee from the Government to save its Crystal unit last year.
Workers shocked
Unite trade union’s regional secretary Jimmy Kelly has called for every effort to be made to save jobs. “The company is too important to the workers and their families, to the city of Waterford and to the nation as a whole to let it disappear.”
Unite regional industrial organiser Seán Kelly said the mood among employees was one of shock and dismay as, having seen the company survive three periods of forbearance, workers had begun to believe that a buyer would be found and their jobs would be saved. “It’s come as a real bolt out of the blue to the workers – it’s a real horror story for them,” said Mr Kelly. He also said they were working non-stop over the last few weeks, even on Christmas Day, in a bid to save the company.
Meetings are to take place throughout the week between workers, union officials and representatives of Deloitte. See p 2 for further coverage.
