Manufacturers in Germany and eastern Europe are likely to benefit from Waterford Crystal's decision to cut production at its Irish plant with the loss of 490 jobs.
The company confirmed yesterday that it plans to cut 490 of 1,000 jobs at its Waterford facility, as it intends outsourcing the production of loss-making lines to cheaper locations.
Its owner, Waterford Wedgwood, controlled by Sir Anthony O'Reilly and his brother-in-law Peter Goulandris, has debts of €400 million. It has been in talks for some time with US-based merchant bank, Lazards, to raise €50 million. Those discussions were ongoing yesterday, according to a Waterford spokesman.
Chief executive John Foley said that the group is likely to outsource the manufacturing of loss-making products, including giftware, light fittings and vases, to locations in Slovenia, Germany or other European countries.
Mr Foley stressed that the plan is designed to copperfasten the security of the other 510 jobs at the plant. The remaining workers will be focused on manufacturing "high-quality, cost-competitive products", he said.
He said that some of the manufacturing at the plant was no longer viable because of high costs and the weakening of the dollar against the euro.
"Seventy per cent of our sales are in dollars, and this is a major problem with the euro at $1.48," he said.
Management at the company is due to meet trade union representatives next week to begin talks that will lead to the redundancies. Last night, Amalgamated Transport and General Workers' Union (ATGWU) official Walter Cullen said the unions' first priority will be to ensure that the maximum number of jobs possible should be kept at the plant.
He also stressed that there would be no compulsory job losses and said that workers would only leave voluntarily on terms acceptable to them.
"A lot of workers are very unhappy at the fact that they first heard about the job losses from media, and not from management," he added.
Both sides believe that it is likely to be well into 2008 before a final redundancy programme is agreed at the Waterford plant.
The Irish job losses are part of an overall programme at the Waterford Wedgwood Group that will see 1,400 staff axed worldwide.
Mr Foley said yesterday that Waterford Crystal needed to cut its costs and to step up its marketing efforts. The group intends to increase spending on this to 6 per cent of sales from 3 per cent of sales.
Waterford Crystal plans to join forces with the Seán Mulryan-controlled Ballymore Properties to develop 32 acres of its land at Kilbarry to boost its on-site retail operations and visitor centre.
Alongside this, Mr Foley said it is planning to "enhance" the factory tours. The overall plan is designed to double visitor numbers to the site to 600,000 over the next five years.
Plans for this are being prepared and are likely to be submitted to the local authority for approval at some point in early 2008.
