Waterford Wedgewood’s new owner plans to outsource jobs

The company should have been given over to its workers, without whom the company is nothing. The old bosses had failed, the workers should have been given a crack of the whip – the British and Irish governments could have helped turn the firm into a workers’ cooperative. But no, both states are structured to help the rich get richer, not to keep workers in good jobs.

Now most of them will be sacked – their jobs going where the wages are cheaper, all part of the “free” trade “free” market race to the bottom. The rest will no doubt be called upon to take pay cuts – all to restore the profitability of the firm for its new owners.

We all face this situation – the fear that if our jobs aren’t exported our wages will stagnate. But if we were the owners, we wouldn’t be trying to squeeze profit out of ourselves – we’d be trying to make a living, not a killing!

This candid article is from the Financial Times, and I’ve put the pertinent information in italics and bold:

The new owner of Waterford Wedgwood plans to use the fabled but struggling ceramic and crystal tableware brands as a platform for acquisitions after cutting costs and transferring production of all but the most prestigious products overseas.

Michael Psaros, co-founder of KPS Capital Partners, said that his strategy for turning round the lossmaking company was to cut costs by streamlining its back office operations and shift more production to cheaper countries.

“It is all based on costs and we are not assuming any revenue growth to achieve profitability,” said Mr Psaros, who completed the purchase of the major assets of Waterford Wedgwood out of receivership last night. “We intend for Waterford Wedgwood to be an acquisition platform in this industry and we’re prepared to invest very significant capital in helping to grow the hell out of the business.”

The deal transferred 3,800 staff and many Waterford Wedgwood assets out of receivership, such as its Staffordshire china factory and visitor centre, and its biggest brands, including Royal Doulton and a licence to make Vera Wang pottery.

New York-based KPS, which specialises in buying troubled companies, will invest €100m (£94m). The company will be “virtually debt free”, after leaving €800m of debt and pension liabilities in receivership. The deal involved operations in 10 different countries, including the US, Japan, Australia and Singapore.

KPS is not buying any assets in Ireland except the stock of products. Mr Psaros said 173 of the 480 staff in Ireland would continue to work, but they would be employed by the receivers, not the new company. A consortium of local Waterford-based businessmen are in talks with the Irish government to fund construction of a new crystal factory in the area. Mr Psaros described the existing factory as “a dinosaur manufacturing plant”.

Mr Psaros said the company was already moving its Waterford crystal production to Germany and Slovakia, and its Wedgwood and Royal Doulton china production to a factory in Indonesia. But he said “it didn’t do it fast enough”.

“We are going to accelerate transfer of activity from the UK to Indonesia,” he said. “Indonesian labour is 85 per cent cheaper than the UK. But the real works of art and highest-end products will still be done in Barlaston.”

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8 Responses to “Waterford Wedgewood’s new owner plans to outsource jobs”

  1. Robert Says:

    Thats New labour for you, the land in which the rich pay less tax and the poor pay more, the land in which Labour sold it’s soul.

  2. George Says:

    To Whom It May Concern,

    I have an internet business selling Waterford crystal products. I purchase directly from Waterford. My buyers prefer to buy Wateford crystal products which are made in Ireland. The Marquis Watercolor Polka Dot glasses which are manufacturer in China, the quality is terrible. There are chips, flaws, discolorations and just poor quality in the glasses. I realize that labor is cheaper in developing countries, but the plan to produce Waterford crystal in Indonesia is a terrible plan. It will be the demise of the good brand name Waterford.

  3. A Very Public Sociologist Says:

    Dear Charlie

    I didn’t have an email address for you, so I hope you don’t mind me leaving this here.

    I’m writing to invite you to take part in the Carnival of Socialism. The Carnival has been bringing a fortnightly round up of everything that’s going on in the global socialist blogosphere for the last three years, and draws from a wide and eclectic mix of blogs. It has had the added bonus of helping the blogging left become a more cohesive and welcoming place, as well as delivering more audiences to the blogs that have already taken part.

    But the Carnival needs your help. We are looking to expand the number of volunteers beyond a core group of ‘usual suspects’. Previous Carnivals are located on its dedicated blog at http://carnivalofsocialism.blogspot.com to give you an idea of what hosting a carnival entails. We have sessions booked up until 26th April but need volunteers for dates after then. So how about it?

    If you would like to sign up for a Carnival, know someone who might, or have any other questions about it please drop me a line at philbc03 at yahoo.com

    Socialist Greetings,

    Phil BC (A Very Public Sociologist)

  4. charliemarks Says:

    Robert – sad, but true…

    George – it is obvious that the new owners are not interested in the long-term future of Waterford Crystal, but in using it as a cash cow – bad news for the companies employees, the Irish economy, and for traders like yourself.

    Phil – thanks for that invite. I’ll have a think.

  5. avmed Says:

    Great post, I love this blog.

  6. ePortfolio Says:

    Is it really true?? I mean ‘m shocked..

  7. Transistor Says:

    everyone would love to be debt free and have some financial freedom then become rich `’`


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