Waterford Crystal A Case Analysis
HISTORY OF WATERFORD CRYSTAL
Waterford Glass was started by two brothers, George and William Penrose, in 1783. It was the most notable of all Irish crystal companies. In 1799, the Penrose brothers sold Waterford Glass to the Gatchell family. The crystal industry was prosperous until 1825. Irish glass manufacturers began to slowly close due to high export duties, the economic depression, and a lack of capital. Waterford Glass was the last to close in 1851. It was reestablished nearly a century later by Charles Bacik and Bernard Fitzpatrick. In 1947, they set up a factory in Waterford, Ireland.
A turning point in the company's history came in 1950 when Joe McGrath made a sizable investment in Waterford Glass. He invested the capital needed to convert the small crystal manufacturing company into one with the potential to become a major player in the crystal industry. This investment gave his family control for the next thirty-five years. Joe McGrath was committed to Ireland and providing jobs for his country. He wanted to reduce the country's high unemployment level. His focus for Waterford Glass was on growing the company through exports to the United States. In 1966, Joe McGrath's son, Paddy McGrath, took over management of Waterford Glass. Like his father, he was dedicated to Ireland and to providing employment opportunities for the Irish. McGrath's quest to provide more jobs for the Irish led him to diversify the company. By 1983, the company had acquired more than thirty non-core businesses. To reflect the expansion, management changed the company's name to Waterford Glass Group. In 1985, Paddy McGrath resigned as chairman of Waterford Glass.
Concurrent with Paddy McGrath's resignation, Paddy Hayes was appointed chairman and CEO of Waterford Glass Group. He immediately began to sell off the non-core businesses in an effort to reduce the company's high debt level. Waterford Glass's debt was virtually eliminated with the issue of American Depository Shares...
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