Wednesday, March 04, 2009
BUYER FOUND FOR WATERFORD CRYSTAL BUT OCCUPATION CONTINUES:
It seems that the Waterford Cystal factory, under workers occupation since the parent company declared bankruptcy, has found a potential buyer in the form of the US based private equity firm KPS capital. See the following article from the Irish Times. The plant ocuupation, however, continues as the buyer has not agreed to purchase the manufacturing plant, merely sales and the tourist centre . The reasons for this may be many. A desire to shield themselves from pension obligations of the older and more experienced staff in the manufacturing plant. The fact that workers in the tourist centre (and perhaps in sales) are more likely to be younger and more transient and hence less 'unionist' and with fewer pension obligations. A desire to shift both cost and responsibility to government. Possible problems at the plant that require expenditures for upgrades. A possible plan to swiftly unload sales and the tourist centre to another buyer (typical of private equity takeovers elsewhere). And undoubtedly many other factors that don't pop immediately to mind.
It is, of course, rather presumptious to give advise from far away, but the workers are definitely right in continuing their occupation until such time as the further activity of the manufacturing plant is guaranteed. While this peicemeal purchase may be beneficial to KPS Capital it is not exactly an optimum solution for either the Waterford workers, the community of Waterford or for the Irish taxpayer. I don't know if there is either a legal or a direct action way to block this dismantling of the enterprise, but, if there is, it should certainly be looked into. Should KPS get what it wants it will end up as the 'monopoly customer' for Waterford Crystal and will basically be able to dictate any and all terms to whatever entity resumes the actual manufacturing.
Waterford Wedgwood sold but 480 jobs remain in doubt:
A QUESTION mark hangs over the future of 480 Waterford Crystal manufacturing jobs, despite yesterday’s deal to sell its parent to US firm KPS Capital.
Receiver David Carson, of Deloitte, agreed the sale of the company’s parent, Waterford Wedgwood, to KPS yesterday. The deal is expected to go through next month.
However, KPS has not agreed to buy the crystal manufacturing plant at Kilbarry, Waterford, where production ceased late last month with the loss of 480 jobs.
The US firm has bought other elements of the business and will keep on sales and back office staff, as well as those working in the visitors’ centre at the site.
This will result in the rescue of up to 250 jobs in Waterford.
There were 708 people working there at the time that the banks appointed Mr Carson on January 5th.
It is understood the US firm has suggested that the Government, trade union Unite, which represents the Waterford workforce, and other local interests establish if the plant can be kept in operation. In that situation, KPS Capital would be willing to buy crystal products from the manufacturing operation, once the prices compare with those made on continental Europe.
KPS will own the Waterford Crystal name, giving it the right to license out manufacturing to contractors, and sell the products under the brand(Interesting and very 'sneaky' conditions-Molly).
KPS has plans to develop the visitors’ centre at Kilbarry, which is a major tourist attraction in the region. It has been suggested that it will seek some support from the Government for this.
Waterford Crystal’s manufacturing workers have been occupying the centre since production ceased at the plant last month.
Yesterday, Unite Irish regional secretary Jimmy Kelly, a former Waterford worker, said the sit-in would continue until such time as the union’s members got the best possible deal. The union’s statement indicated that should include maintaining manufacturing at Waterford and a solution to the group’s pension deficit.
The pension fund had a shortfall of €111 million last October. If it were to become insolvent, workers who have paid into it, but have yet to retire and benefit from the scheme, could lose out.
Minister for Tourism Martin Cullen, a TD for the constituency, said the Government would work to see if there was a way of reviving manufacturing at the plant. “We will certainly look at any proposals,” he said.
KPS intends to restart manufacturing at the group’s British operations in Staffordshire, where Wedgwood and Royal Doulton china are manufactured.
Waterford Wedgwood’s businesses include Waterford Crystal, Wedgwood and Royal Doulton china in Britain and Rosenthal porcelain in Germany.
The group’s bankers placed it in receivership last month after it failed to meet repayments on its loans. Businessman Sir Anthony O’Reilly, and his brother-in-law, Peter Goulandris, had invested €400 million in the group.