Waterford and the South East have long had an industrial heritage but, unfortunately, a high wage cost economy like Ireland is going to find it harder to maintain manufacturing jobs from now on. This is a huge challenge for Brian Cowen, our new Taoiseach, and the Waterford Crystal dilemma is one of many he must face.
Pay pauses and lowering the burden of taxation on industry must surely be some of the options in the coming years. The rates burden on manufacturing should be reduced for firms like Waterford Crystal which are a huge attraction to tourists. In the past, the PAYE payments from the company were a huge yield for the government but this seems to have been forgotten or ignored in the Kilbarry plant’s hour of need.
One can only hope now that new investors will be found. The real danger of Waterford Crystal closing down its plant has been widely noted. All other options need to be considered. If a loan guarantee is not possible, the questions arises about what can be done. There may be retraining grant options that would maintain employment and reduce costs of manufacture. Grants were given in the past for the tank furnace following a request by the company.
Not all options are exhausted at this stage and Enterprise Ireland should be
anticipating difficulties and advising firms on how to trade out of current difficulties. More market development, organisational change and new business model development would be a positive move.
The Government needs to develop and intensify supports for business and workplace innovation to allow such change. Industries like Waterford are key contributors to the Irish economy but firms must change and change rapidly.
Ballymore Property was considered a future partner of Waterford Crystal in the development of property but, perhaps, they could be new financial partners to turn around the financial situation.
Utilising some of the ‘out of use’ industrial property for retail purposes could release capital and create new jobs and activity in the tourism sector and that would be a welcome development. The hunt for a solution must continue and the negative cabinet decision on the loan guarantee should not be the last word.
Other manufacturing firms also face difficulty. Cappoquin Chickens, which at one stage was the largest employer outside of Waterford Foods in West Waterford, has gone into receivership. Other firms like Aventis, who are in foreign ownership, also closed after amalgamations between two major European conglomerates. The government has a central role in allowing manufacturing to develop and be sustained and it should not be forgotten that 220,000 people work in manufacturing currently with 165,000 employed indirectly.