Firms count the cost of impending war

EMPLOYERS who are heavily dependent on the US market are already counting the cost of the threat of war on Iraq before battle begins.

One of the country's leading firms, Waterford Wedgwood, said yesterday that it couldn't rule out a return to short-term working for its 1,600 staff.

Waterford Wedgwood group chief executive, Redmond O'Donoghue, said the threat of war on Iraq could force it to return to short-term working maybe even shut down one or two days a week.

The company, which has plants in Dungarvan and Waterford city, also put its staff on short-term work last year. Performance in the first two months of this year has not met expectations, said Mr O'Donoghue. His comments come in the wake of a profits warning and a 13% dip in share value on Monday.

"A couple of weeks ago, the three main morning television shows in the US gave 30 minutes to tell people what to do in the case of a poisonous gas attack how you seal your windows, how you should have enough water for everyone in the family for three days. You can imagine the impact of that," he said.

The Federated Group of Department Stores, which owns Macys, Bloomingdales and 450 other stores around the US, issued two sales warnings in the month of February.

"That has never before happened in my lifetime. They had anticipated at the start of February that sales might be down 4% on last year. Then about two weeks later, they said it would be 8% down on last year. The FGDP is far and away the biggest customer we have in the world."

Bosses at Blarney Woollen Mills and their employees are also on guard with few US tour operators willing to book more than three weeks ahead of planned travel. Staff are already starting work a half hour later each morning and chief executive Freda Hayes said uncertainty in the market meant nobody was sure what lay ahead.

The group employs 500 people through its hotel, shops and knitwear factory, all of whom are heavily dependent on the US market. And hundreds more are employed during the busy summer months.

"All we can do is keep our fingers crossed," said Ms Hayes. "The difficulty is that people are only booking two to three weeks in advance."

The tourism industry is also bracing itself for a tough time. During the 1991 Gulf War, Bord Fáilte figures showed that the number of US visitors had fallen by more than 110,000 on the previous year.

Tourism Ireland chief executive, Paul O'Toole, said they had plans to deal with a war situation, but there were many unpredictable scenarios that could unfold.

"We will concentrate on Britain and continental Europe and will put an increased emphasis on those markets but we will also monitor the US situation closely."