WATERFORD CRYSTAL is closing its plant for up to three weeks over the next two months, as the Government mulls a request from its parent company for a State guarantee for a €39 million bank loan for the plant's survival.
Workers at the troubled Waterford Crystal plant in Kilbarry were told by management yesterday afternoon that the company intends to introduce "short-time" working, under which the plant will close for three weeks over the coming two months.
Waterford Wedgwood, the parent company of Waterford Crystal, has asked the Government to guarantee a €39 million loan to the group because it cannot borrow more money from its banks due to the covenants on its existing loans.
Waterford Wedgwood had net debts of €473.4 million last September and the company's main shareholders, Sir Anthony O'Reilly and his brother-in-law Peter Goulandris, have propped up the company, investing €300 million in recent years.
The company, which lost €260 million in the two years to March 31st 2007, announced last November that it was cutting 490 jobs at the crystal-manufacturing plant and that any State guarantee would secure the remaining 550 jobs at its factory in Waterford.
Waterford Crystal employed 3,200 people in the late 1980s but its parent company has been hit by a downturn in the sales of its luxury goods in recent years.
The Government is expected to make a decision shortly on the group's request for the State guarantee on the €39 million bank loan. KPMG is advising the Government on the issue.
A Government spokesman said the request raised "complex legal and financial issues" and those will "have to be explored". He said that in terms of providing support "a suitable financial mechanism with appropriate company guarantees" will have to be considered.
Government advisers are examining whether the State can legally underwrite loans within EU rules.
They are also believed to have noted the €147.8 million pension deficit in the Waterford Wedgwood pension fund and a High Court case being pursued by a former Waterford Crystal worker over the operation of the company's pension scheme in the 1990s.
There are fears in political circles that assisting Waterford Crystal could draw the Government into the future closure of the factory. The company's request for support has been discussed at Cabinet several times in recent weeks.
"A decision cannot be too far away," said a Government source.
Sources close to the company said short-time working had become "a frequent occurrence" over the last five years because of the fall-off in sales. The factory last went on short time in March.
Some workers have claimed to have turned down other jobs as they must remain with the company until it can afford to pay pension settlements.
Billy Collins, who has worked for more than 30 years as a glass cutter and general operative, said: "As soon as I get the money, I'm gone. I'm already after losing three jobs just waiting to get out."
"The uncertainty is still there," said Pat Walsh, a general operative with 33 years' service.
"There's a lot of frustration.They say they're waiting on the Government. I think the Government will have to step in."
Walter Cullen, regional industrial organiser of Unite, urged the Government to make a decision to support the company's request as soon as possible.
