Waterford fighting to revive crystal manufacture

TOURIST GIFTWARE specialist House of Ireland advertises Waterford Crystal on its website, along with Newbridge Silver, Claddagh rings and other Irish products, writes BARRY O'HALLORAN

One thing the website does not mention is that Waterford Crystal has not been made in the town whose name it bears for the last 11 months, but is instead manufactured somewhere in eastern Germany.

A year ago this week, a group of international banks appointed David Carson of Deloitte Ireland as receiver to Waterford Crystal’s parent, Waterford Wedgwood. Late in 2008, the group defaulted on an €8 million loan repayment which had been due against a total debt of €166 million which it owed the banks involved.

Its total debts were in the region of €336 million, and its board, including chairman Sir Anthony O’Reilly, spent a fruitless three months at the end of 2008 seeking new investors.

This week, appropriately enough, Mr Carson put Waterford Crystal’s main plant at Kilbarry up for sale; a small sister facility in Dungarvan has been on the market since last month.

The industrial-zoned site has attracted some international interest already, and could fetch between €10 million and €20 million, but most sources agree that it seems unlikely that a new buyer is going to attempt to revive crystal manufacturing there.

The sale of Kilbarry and Dungarvan will mean the beginning of the end of Carson’s tenure.

A receiver’s main duty is to recover as much as possible of the debt due to the lenders who appoints him. If and when those deals go through, he will have very little unfinished business.

But for a lot of the people involved, there is plenty of unfinished business. Waterford Wedgwood had a €111 million shortfall in its pension fund. The British government was able to compensate workers at Wedgwood through a pension protection fund, but around 800 former staff at Waterford have been left with no pensions.

Yesterday, Unite regional secretary Jimmy Kelly confirmed that the union is pursuing a case against the State as the Government failed to create a similar protection fund. The trade union, which represented the bulk of Waterford’s workers, believes it has a strong case, which pivots mainly on precedent set in the EU’s European Court of Justice.

Not only that, Kelly says that the Government was aware of the precedent, and Irish officials spoke to their British counterparts about the case and its implications for states which did not have such protections in place.

The case is likely to go to the commercial division of the High Court, and the trade union leader believes that there could be a resolution by the end of the year.

Kelly is a former Waterford Crystal worker and along with his trade union colleagues is involved in a group that wants to revive crystal production in the city. That could well prove a lot harder than suing the State.

A lack of cash forced Carson to halt production in Waterford last February, though he had tried to keep the business going. His decision sparked a workers’ sit-in at the plant in Kilbarry that lasted until US private equity house KPS bought most of Waterford Wedgwood’s assets the following month.

The two assets that KPS did not buy were the Kilbarry plant and Dungarvan, which the group shut in 2005. It did buy the Waterford Crystal brand, and its attendant intellectual property, which included the individual product designs. This allowed the buyer to make crystal any where it wanted and call it Waterford. The factory, barring its visitors’ centre, was closed, and around 700 people lost their jobs.

Even while it was clear that KPS did not intend manufacturing crystal in Waterford, a number of local groups still believed that crystal production could be revived in the city. A group, made up of business people and trade union officials who represented the crystal workforce, began to explore the possibilities of renewed manufacture.

The group met KPS and were given some grounds for optimism. The US investor said that it would be willing to buy crystal made under licence in Waterford, once the price was in line with what it could get in eastern and central Europe.

Efforts to restart production met their first setback with the death of one of the group’s leaders, architect Nicholas Fewer, a well-respected figure who was committed to reviving crystal production in the city.

The announcement this week that Kilbarry is up for sale made the prospect of restarting production there seem even more distant. However, Kelly says that there are plans to develop a tourist centre at the old Theatre Royal in Waterford where visitors will be able to buy crystal and watch it being made.

Creating meaningful employment will require something bigger, namely stemware, the crystal glasses that were part of Waterford’s stock in trade.

“Restarting stemware production would lead to the creation of a decent number of jobs,” Kelly says.

For that they will need a furnace. This is so central to the process that when Carson had to shut down production last year, he kept on staff whose job it was to keep Kilbarry’s furnace going, as shutting it down and restarting it would have cost at least €3 million.

Even now, Kelly says it should be possible to restart the furnace at Kilbarry, which he points out has not been completely shut off, for around that figure. However, building a new one from scratch somewhere else would require greater investment, planning and a licence from the Environmental Protection Agency.

Kelly argues that restarting crystal production is not just in the interest of former Waterford workers and the region itself, but it would also benefit KPS. The trade unionist believes that it would not be in the brand’s long-term interest to cut its link with the city.

If any revival were to bring KPS on board, the operation would have to have a tight cost base, as the US investor made it clear that it would only buy products at what it considers to be right price.

Nonetheless, Kelly argues that it can be done. “I am on the page which says that this is achievable,” he says. “I am not in any way giving up on production of Waterford Crystal restarting here in Waterford.”