DUBLIN, Ireland -- Debt-ridden Waterford Crystal threatened Friday to withdraw from Ireland unless the government agrees to act as guarantor for $61.7 million in bank loans.
Ireland's iconic crystal maker issued its warning after the Irish Stock Exchange closed. The government declined immediate comment.
In its statement, the company said it "believes that it is desirable for Ireland to maintain Waterford Crystal in Ireland. It further believes that the commitment of its investors deserves the support of the government, which is being asked for a guarantee for a three-year period, not a loan or a grant."
The crystal plant, a division of Waterford Wedgwood PLC, has struggled for several years to reverse losses driven by labor costs, changing international tastes and the exceptionally weak U.S. dollar. Americans traditionally account for half of Waterford's crystal sales.
The plant, which has operated in the southeast city of Waterford for six decades, has already moved several production lines overseas to Slovenia, Poland and Brazil, and earlier this year began negotiating with labor unions to halve its Irish work force to just 500.
But yesterday's statement emphasized that the whole plant could shut down if the government did not intervene with a loan guarantee. Irish taxpayers would be liable to repay the debt if Waterford defaulted.
The government is reportedly torn over whether to offer a life raft to one of Ireland's most famous -- and most financially desperate -- industries.
Waterford Wedgwood in September reported a net debt of 473.4 million euros ($748.9 million), and has since struggled to land additional bank loans, in part because of the global lending clampdown.
Government concerns include whether state aid would be approved by European Union competition authorities, and whether it would even be appropriate to bail out a business that is chiefly owned by one of Ireland's most prominent billionaires, publishing magnate Sir Anthony O'Reilly, a former CEO of Pittsburgh's H.J. Heinz Co.
Waterford Crystal traces its lineage to a factory opened in the town of the same name in 1783, although that business failed in the 1850s. The brand was revived by a Czech immigrant to Waterford, Miroslav Havel, in 1947.
The crystal side of the business thrived throughout the 1990s and at its height employed 3,200 in Ireland. But the company's other facility for cutting lead crystal by hand closed in 2005, leaving only the flagship plant in Waterford, which is one of Ireland's top tourist attractions.
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