Page last updated at 09:13 GMT, Wednesday, 28 January 2009

Wedgwood faces identity crisis

By James Melik
Business reporter, BBC World Service

Indonesian worker
About 1,500 people work in Indonesia for Royal Doulton and Wedgwood

Despite the efforts of Irish entrepreneur Sir Anthony O'Reilly, who has been pouring money into the parent company Waterford Wedgwood for years, the future of two of Britain's most venerable tableware brands, Wedgwood and Royal Doulton, is currently in the hands of administrators.

But as operations in the UK have struggled and several hundred workers in Britain have lost their jobs, the company's plant in Indonesia has been making money and is likely to be one of the main attractions to potential buyers.

Rising costs in the UK means overseas plants are competitive and while there used to be 26 manufacturing sites in the UK, that figure has now been reduced to just a couple.

Some 1,500 workers are employed in a clean modern factory just outside the Indonesian capital Jakarta, where they produce between five and seven million pieces of tableware every year.

The factory has been purpose built, whereas most of the British factories were Victorian buildings and were therefore less efficient.

Relocation

Outsourcing of production to Indonesia began more than a decade ago and has been controversial in Stoke on Trent, the city in the English Midlands that was once at the centre of the pottery industry.

People have moved away from formality, even when dining out
Jeffrey Tollman

Some residents of Stoke have expressed anger at the Indonesian factory and have raised questions about the conditions there.

But the director of the subsidiary points out that there is a purpose-built mosque, a canteen providing one free meal a day, a health clinic, a trade union building and a football pitch.

As for pay, production director John Wright admits they do not pay the highest wages in the area.

"But the package we've put together is a good package," he insists.

"Our labour turnover and our absence rate is nearly 1%. Generally speaking it's a reasonable environment to work in."

Cultural changes

The loss of manufacturing jobs from industrialised countries to the developing world is not new, and neither are falling sales for Waterford Wedgwood.

Expensive formal dinner sets are no longer so popular among couples getting married and in a throw-away society many people prefer cheaper, more practical china that can be replaced more easily if it gets broken.

Wedgwood cups ans saucers
The company tried to update its image by using modern designers

But Wedgwood does still have its fans, notably in the United States where many cities boast Wedgwood appreciation societies.

Jeffrey Tollman is president of the Wedgwood Society of New York, and he is not surprised at the company's demise.

He believes people no longer look for substance, quality and formality.

"People have moved away from formality, even when dining out," he says.

"If you look at restaurants in Manhattan, we are down to three restaurants which require a tie and a jacket."

Antiques expert David Harper blames consumers who are "suffering from the throw-away culture in society".

"Not very long ago, people wanted to buy items of extreme quality, which you could add to when you could afford it," he says.

"It would last a lifetime, you would pass it on to your children and you'd get great pleasure and enjoyment out of it."

Loss of status

Despite its location, the brands remain quintessentially British and the huge kilns and the expertise have been imported but could tableware brands synonymous with British values and tradition survive if they came exclusively from outside the country.

The Wedgwiid logo on a plate
Wedgwood china has graced royal tables and wedding lists for 250 years

Mr Harper thinks the company is losing the plot by going elsewhere.

"The clays and bones from cattle for the bone china Wedgwood is famous for are indigenous to Staffordshire," he says.

He firmly believes that the product loses kudos and style and desirability when manufactured away from its original factories.

Mr Tollman agrees.

"I recently bought a Wedgwood cup made in Portugal with pictures of London on it and gave it to a friend as a joke," he says.

So whilst administrators in the UK decide what to do with Waterford Wedgwood, work in Indonesia continues.

In the meantime, people within the Wedgwood family are planning to bid for the firm and bring manufacturing back to the UK.

A discussion on this subject was broadcast on BBC World Business News dated 23 Jan 09



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SEE ALSO
Wedgwood cuts numbers clarified
16 Jan 09 |  Staffordshire
US firm in talks to buy Wedgwood
08 Jan 09 |  Business
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