Warning signs for tradition are becoming crystal clear

IF Waterford Wedgwood can knock 70% plus off the unit cost of production by outsourcing its earthenware division to China, surely that raises serious question marks over the 16,000 jobs at Waterford Crystal Clearly there is no sentiment in business.

The 1,058 people working at Johnson Brothers know that to their cost.

Johnson Brothers has been operating in the heart of the ceramics industry in England for 120 years, a lot longer than Waterford Crystal has been in Waterford.

While the products are substantially different it would be harder to argue on purely financial grounds for the transfer of production out of Ireland given the investment the group has put into its Waterford plants and WW chief executive Redmond O’Donoghue denied any immediate threat to the crystal jobs on that basis.

However, the decision to axe 120 years of tradition in the UK is symptomatic of the enormous pressures facing this most traditional industry, where human craftsmanship is a major component of the overall cost of production.

For 10 years Waterford Crystal has been outsourcing 25% of its production and the principle has already been conceded that its the brand name that counts, not where it is made.

It must be said, however, that when Tony O’Reilly stepped in 10 years ago to rescue WW, both brands were in grave danger of going under.

That’s no longer the case due largely to his and his family’s commitment to the group.

However, the bottom line is that WW continues to struggle.

The markets are not impressed and with the start of the current year offering little by way of comfort to the group, do not expect much from a share price which has been in the doldrums for some time.