For more than two centuries, Waterford
crystal and Wedgwood china have been symbols of Irish and British
craftsmanship. Now, their future may lie in Asia.
Drowning in red ink, the storied brands, which merged in 1986,
have moved most ceramics production to Indonesia to cut costs and
now plan the same fate for crystal manufacturing.
Their headquarters may soon follow.
Short of funds for operations and loan payments, Waterford
Wedgwood PLC is in advanced talks to sell a controlling stake to a
U.S. private equity fund for roughly 600 million euros ($846
million) in cash and assumed debt, three people briefed on the
negotiations told The Associated Press late last week.
The prospective new owners may move the company's management and
possibly its headquarters to Indonesia, one of the sources said.
They would not identify the fund and spoke on condition of anonymity
because the talks are confidential.
With a Friday deadline set by creditors, a deal could come as
soon as this week, though the Bank of America-led lender group has
extended the company's deadline three times previously.
Waterford Wedgwood, which lost 75.8 million euros (about $107.2
million) in the six-month period ending Oct. 4, has struggled for
several years like other fine china makers, as formal dining trends continue to give way to more informal habits. But the global
financial crisis has pushed it to the brink of bankruptcy. As credit
dried up, the company could no longer raise money to cover costs.
Its shares have collapsed to one-tenth of a euro cent on the Irish
Workers have made Waterford crystal in Ireland and Wedgwood china
in England for nearly 250 years. Their crafts have graced the tables
of royalty and made innumerable wedding gifts for the better-off in
the United States and elsewhere.
But six years of losses has driven Wedgwood to move all major
ceramics production from the green hills of Staffordshire county in
central England to the industrial outskirts of Jakarta, Indonesia
over the past two years.
Only a small number of high-end products - hand-painted figurines
and the iconic blue and white china - will continue to be made in
England. The move to Indonesia, which cost 1,500 jobs in England,
follows the opening of a smaller ceramics factory in China in 2004.
On the Waterford side, half of its crystal production was shifted
to Eastern Europe last year, cutting 1,400 jobs in Ireland. Now, the
company is looking to move all crystal work to Asia, with Indonesia
a prime candidate.
"This is part of an expansive search for the best partners to work with in Asia," said James Philip Murtagh, senior vice
president of Waterford Ltd.
In the English city of Stoke-on-Trent, where Josiah Wedgwood
turned the family business into a global pottery center, the
founder's statue still welcomes visitors arriving by train. But the
skyline is dominated by dormant bottle-shaped kilns. The canals once
used to transport fine china are filled instead with pleasure
The move to Indonesia all but brings down the curtain on English
clay processing in a region nicknamed "The Potteries." At its
peak, the industry employed tens of thousands.
The latest layoffs in December included Jeanette Seabridge, 55,
who started as a teenager on the production line at Royal Doulton, a
subsidiary of Waterford Wedgwood. After decades molding delicate
ceramic flowers, she held onto her job longer than most because of
traditional skills that took her a year to learn.
"I made 360-400 flowers a day, and at the height of production,
there were as many as 80 women working with me," she said. Now
heading into early retirement, she has taken a part-time job giving
demonstrations at the Gladstone Pottery Museum.
The $50 million move to Indonesia will cut manufacturing costs in
half and hopefully enable the business to turn a profit in 2009 or 2010, depending on the depth of the global slowdown, said Tony
O'Reilly Jr., whose family is one of two that together own a
majority stake in Waterford Wedgwood.
The move became inevitable because of rising energy costs,
shrinking sales and the falling U.S. dollar, which ate into profits
from the important U.S. market, company executives said.
"We're not leaving Stoke-on-Trent completely, but everyone else
has either migrated their product, is sourcing overseas, or sadly
has gone out of business," O'Reilly said. In another blow to the
town, porcelain maker Royal Worcester & Spode filed for a form of
bankruptcy protection in November after failing to find buyers for
After onsite training, Indonesians have taken up positions as
managers, designers, technicians and painters at a factory that can
produce 10 million pieces a year. It will employ about 1,750 workers
by early 2009 as severance packages are settled in England, O'Reilly
With an average monthly salary of about 1.8 million rupiah
($150), compared with $1,950 in Britain, their work is vastly
cheaper. The reduced costs will enable Waterford Wedgwood to boost
spending on marketing and create new products, some with a hint of
the Indonesian culture of batik and shadow puppets.
Initial concerns that Indonesian-made china would fall short of
Wedgwood's reputation - some of its tableware sets cost thousands of
dollars and become family heirlooms used only on special occasions -
were overcome when products began rolling out of the new plant.
O'Reilly said the Indonesian-made china meets Wedgwood's high
standards, which earned it royal status from the queen of England in
"There is a culture of artisanship," he said on a visit to the
Indonesia factory in November. "Our craftspeople here are as good,
if not better, than some of those we have in the United Kingdom."
Though the packaging will say "Made in Indonesia," all pieces
will still be stamped "Wedgwood. England 1759" - labeling the
company says is permitted under international trade law.