Cracks showing in Waterford

Analysis:How many ways are there to smash a glass?

Waterford Wedgwood's shareholders must feel that the company is adopting an all too rigorous approach to answering the question. The poor sales and earnings performance announced yesterday will chip away at whatever optimism they have left after the long and painful litany of problems at the company.

For workers at Waterford Crystal's Kilbarry plant, the cracks in evidence in the group's half-yearly accounts are largely academic. They received their shattering news last week, when management entered negotiations with unions in relation to its cost-cutting programme.

Up to 500 jobs are expected to be lost, although the company has not yet confirmed this figure.

The group remains committed to retaining some manufacturing presence in Waterford, according to chief executive Peter Cameron. Although about 15-20 per cent of Waterford Crystal's production is already outsourced, to abandon its home country completely would damage the brand.

In recent years, Waterford Wedgwood has raised more than €400 million to wash away its difficulties, with the bulk of the money pouring in from chairman Sir Anthony O'Reilly and his brother-in-law, deputy chairman Peter Goulandris.

But the money is not as free-flowing as its chief executive would like. Suffering from jet lag and a cold, Cameron did not seem particularly happy as he related Waterford's latest hiccup: the company was unable to supply its customers during the early part of the vital Christmas orders season because it ran out of cash.

Cameron says this "lost opportunity" has not caused irreparable damage. "I promise, I'm not downbeat," he said. But this latest chink is certainly unfortunate, especially if Waterford's claims to renewed popularity are true.

Cameron says there is now "genuine consumer enthusiasm" for its crystal and ceramic wares - as opposed, presumably, to the forced smile of enthusiasm people fake when they receive an unwanted gift. The brand is still iconic, he believes.

The modernisation programme has involved enlisting the services of a clutch of household-name designers. John Rocha, Jasper Conran, Vera Wang, Kelly Hoppen and Marc Jacobs have all endorsed the Wedgwood brand, while Julien Macdonald and Gordon Ramsay have graced its Royal Doulton ceramics brand.

The company is pinning its future in large part on the success of these celebrity associations.

But for many of its workers, with the outcome of the redundancy negotiations due within six weeks, there may be no future at all for them at Waterford Wedgwood.