With the closure of its Dungarvan plant and the loss of 500 jobs, the future is unclear for Waterford Crystal, writes Paul Cullen.
It's part of what we are; a national brand synonymous with things Irish and a long-term provider of well-paid jobs through times thick and thin. So when Waterford Crystal announces that it is cutting 500 Irish jobs and closing one of its two plants in the south-east, it's a major blow.
With falling profits and a weak dollar, the outlook for the company has seemed bleak for some time. Even so, Wednesday's news seemed to come as a shock to the 400 workers in Dungarvan whose plant is being closed down.
"Out of the blue" was the description many dazed workers reached for as they emerged from a two-hour meeting with management, at which the closure was officially revealed.
"Yeah, there were rumours over the past two years, but they were rumours about short-time working, not closing," said one worker. "They've been threatening for years to close, but you thought it would never happen," said another.
Where financial analysts saw the need for massive cost-cutting in the company, the Dungarvan workers failed to understand that recent privations were the thin end of the wedge. They were already on a pay freeze and had just come off seven weeks of short-term working, and thought that was as bad as things could get.
"I thought we'd get another run out of it, I really did," said Brigid Mulcahy, who has worked in the Dungarvan plant for the last 23 years. "We all believed they would build the new [ furnace] tank and things would just go on."
According to Colm Nagle, editor of the Dungarvan Leader, the longer the company's difficulties continued, the less chance it seemed there was of closure. "This is going to be a devastating blow, particularly for families with mortgages, and it will have a big knock-on effect in the area."
"Whenever we'd ask a question about the furnace, we'd get the same line constantly: 'We don't have the money, we don't have the money'," said another angry worker. "Yet there's money to pay management's wages and I guarantee they are on a lot more than any worker in Dungarvan or Waterford that's working day and night on shifts and at weekends away from their families . . ."
Last year Redmond O'Donoghue, the chief executive of the parent group, Waterford Wedgwood, was paid €1.062 million and Waterford Crystal chief executive John Foley was given a €180,000 pay rise, bringing his salary up to €672,000. This in a year when the company posted pre-tax losses of €45 million.
Waterford's pullout from Dungarvan is a massive blow for the town, equivalent to the loss of about 10,000 jobs in a larger urban centre such as Cork. As glass-blower Anthony O'Riordan, who has two brothers working in the plant, put it: "We lost the creamery [ Glanbia], we lost the leather factory [ Irish Leathers] and Pfizer and now Dungarvan has lost its jewel in the crown."
YET TO THE outside visitor, Dungarvan is doing well. The county council offices are in a smart new building, all atriums and internal walkways, and the town has expanded enormously in recent years, thanks to the urban renewal incentives and a growth in tourism. Like many Irish towns these days, it looks livelier than it used to, even if the traffic has got worse and many areas have seemed to be permanently under construction.
"We lay dormant for a long time but now we have a great town. It was always a good place but it has developed a lot over the past five years," says Nagle. Pharmaceutical company Glaxo SmithKline is now the main employer, and Century Homes and McInerneys are other important firms in the area.
The Ordnance Survey has been earmarked for a move to Dungarvan under the Government's decentralisation scheme, but no one seems to know when this will happen.
The problem for those working in "the glass" is that most know no other working life. "A lot of these people have been with the glass all their lives, they came out of school and went straight into the factory," Nagle remarks.
"You're too old to start a new trade, but too young to retire," says Elaine Cummins, whose husband has worked as a glass-blower in the plant for 26 years. "Plus there are lots of married couples down there, so that's two jobs gone in the one house."
In a booming economy, there is work, but it might involve commuting to Cork or Waterford. Local employment is more likely to be in services, construction or tourism, and to be less well paid than manufacturing work. The former creamery site is now occupied by a shopping centre, but supermarket wages are unlikely to match the handsome pay-packets of shift workers in a luxury goods firm. Against that, few of the workers I talked to seem to have significant mortgage worries.
The ATGWU, which represents most workers, says it will fight the closure. Its suspicions have been heightened by the company's refusal to give a plant-by-plant breakdown of the company's performance. A rerun of the acrimonious strike of the early 1990s seems a possibility, albeit a remote one; the mood this week was one of resignation rather than militancy.
Although Waterford Crystal took the decision to axe Dungarvan only recently, there is "no going back" on it now, according to chief executive John Foley. "Nothing else could be done," he said. "We do not have the capability to keep two plants open."
Up to €30 million will be spent on shedding the Irish jobs and another 160 jobs at a porcelain company in Bavaria, with most of this likely to come from the sale of land at the Kilbarry plant in Waterford city. Last month, Waterford councillors obligingly agreed to rezone land around the company's sports centre for commercial use, largely in the belief that the €33 million windfall from the sale of the rezoned property would secure the glass jobs.
Now it seems the money will be used not to keep the jobs but to pay for their elimination.
In spite of Foley's bullish assertion that "these jobs are secure," question marks still hang over the company and its remaining 971 Irish workers. A company that shed 2,000 Irish workers in the 1990s cannot convincingly say "never again".
The professed ambition of the chairman of Waterford Wedgwood, Sir Anthony O'Reilly, to make the company the "low-cost operator" in its sector can only be achieved by job cuts and/or outsourcing. When the restructuring process is complete, one-quarter of Waterford's crystal-making will have been outsourced abroad.
Many analysts believe Ireland is too expensive for manufacturing companies such as Waterford, and job migration to low-cost countries is inevitable. As Foley himself pointed out, energy, waste disposal and other utilities costs have increased 19 per cent over last three years.
HOWEVER, THE PICTURE is more complex. In spite of its problems, it would be wrong to write off Waterford completely, or to think its continued survival is not worth fighting for.
For a start, this is a high-tech, or at least high-skills business. Sixty years of glassmaking technology counts for something; some of the work Waterford outsourced to cheaper countries has already returned to Ireland because quality standards weren't met.
Also, national brands are important, even if we don't consume Waterford Crystal as much as that other Irish brand, Guinness.
Even if many of us think heavy crystal is dated and naff, Americans disagree in their thousands. It is, after all, the US market, and the traditional strength of the dollar, that has kept the crystalmaker in business for so long. Foley points out the company has maintained its 39 per cent market in the US for the Waterford and Marquis brands; however, this is a declining segment of the glassware market as US consumers increasingly buy their tableware in big outlet stores.
If Waterford's cut-glass tableware is indeed rapidly becoming a thing of the past, the bus loads of tourists who streamed through its visitor centre this week have yet to be told. Even as the company was telling the Dungarvan workers last Wednesday they were out of a job, hundreds of mostly American tourists were marvelling at the intricate skills of glass-blowers, cutters and polishers featured in the centre.
If the dollar were about to bounce back, one might make light of the company's present troubles. However, many analysts feel a currency crisis is looming in the US, so Waterford would be foolish to pin its hopes on a recovery in the dollar.
With Foley this week emphasising the need for more advertising of the company's product range, it is ironic that Waterford Crystal has received acres of unexpected and priceless publicity over the past 12 months. However, that story, the one about the horse and the Olympic gold medal and the ensuing drugs scandal, is one that no one in Waterford wants to be reminded of.