Hugo Boss could move part of US plant production to Romania

Germany’s Hugo Boss luxury goods producer is set to close a US plant employing 300 people in April 2010 with suit production to be transferred to Romania, Bulgaria and Turkey, countries with low wage costs.

“Hugo Boss plans to continue to pay the 300 workers in Cleveland to the end of April 2010 even if production needs diminish prior to that date. Beyond this, management intends to work closely with the union to negotiate a fair severance package,” the company said in a news release quoted by cleveland.com website.

Workers United trade union, representing the Cleveland plant employees, has been negotiating for nearly a year on ways to turn the plant around.

Workers United representatives were not available for statements, but during a protest move organised in December at the Cleveland plant the trade union handed out fliers specifying the plant’s suit production would be moved to production facilities of Romania, Bulgaria or Turkey, where costs are lower. The information was transmitted by Hugo Boss representatives to trade union leaders during negotiations between the two parties.

The plant has operated just three days a week for almost a year now, a period during which employees received only 60% of their wages.

Hugo Boss bought the Cleveland plant in 1995, when it took over Joseph & Feiss Co. local suit producer.

Hugo Boss German company is one of the most renowned luxury goods producer, with the goods being available in 110 countries through 330 own stores and more than 1,000 franchises.