Months of labor negotiations have failed to rescue a Hugo Boss men’s suit factory in Cleveland, thereby handing another defeat to American manufacturing.

This story first appeared in the January 4, 2010 issue of WWD. Subscribe Today.

Hugo Boss last week confirmed its decision not to extend the collective bargaining agreement with the Workers’ United union for the production plant, which will shut down.

Hugo Boss will pay the 300 union workers through the end of April, when their contract expires. Beyond that, it said it would work closely with the union to negotiate a fair severance package and the opportunity to receive outplacement training for all affected production employees.

WWD reported last spring that lawyers for the Metzingen, Germany-based company had begun meeting with union leaders to discuss closing the facility and initiate negotiations for union employees’ severance. Union officials said they refused severance at the time and fought to keep the factory open.

In October, Hugo Boss confirmed the parties were striving toward a new contract with the potential to extend the union jobs. By then, company executives had gotten directly involved in the negotiations, which it said were necessary to keep the factory “competitive within the global marketplace.”

Last week, Hugo Boss said the reason for its final decision was a lack of full utilization of the facility’s production capacity “and the fact that it is not globally competitive.” The plant makes only two styles of standard men’s suits and does not produce any fashion pieces.

Hugo Boss said it worked actively with the state of Ohio and the city of Brooklyn, Ohio, to find ways to save the plant, but those efforts did not yield a satisfactory solution to keep the plant operating. In addition, extensive talks with the union did not bear any viable alternatives that would make the production plant competitive. Therefore, it said, it had no economic alternative but to close the plant.

“While the decision to close this facility is not one taken lightly by Hugo Boss, the company does acknowledge and thank the workforce for their dedication during the time this facility has been part of the Hugo Boss production organization,” the company stated.

Beyond the Ohio plant, Hugo Boss employs another 900 people in the U.S. in stores, showrooms and administrative duties. In addition, the company said it has a growth strategy in the U.S. that entails creating jobs in sales functions.

Hugo Boss took over the Cleveland facility in 1989, when it acquired Ohio-based tailored clothing company Joseph & Feiss Co., which had been making suits in Cleveland since the 19th century. The factory has served as the center of Boss’ American suit production and distribution for over 20 years. It employed more than 400 people in total.

The closure highlights the continued decline of the nation’s tailored clothing manufacturing — a market that once supported thousands of workers and countless brands. Today, only Hugo Boss, Individualized Apparel Group, HMX Group, JA Apparel and Southwick operate sizeable clothing factories domestically.

Workers United is a relatively new organization that split last spring from UNITE HERE, the largest apparel labor union in the U.S.

Bruce Raynor, president of Workers United, was not available to comment.

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