ECCO’ is reducing production at its Portuguese factory from 2.5 million pairs to 800,000 pairs a year, resulting in the elimination of 369 jobs. As of next April, the balance of 1.7 million pairs will be transferred to the company’s own factories in Slovakia and Thailand, where labor costs are lower.
The big Danish group, one of the first to have set up a shoe factory in Portugal in 1984, points out that it is taking a different route from other companies which have simply shut down their local operations. Noting that the general social, economic and educational levels in Portugal have increased since then, ECCO has decided to restructure its facilities there, turning them into a “group research & development center” concentrating on advanced and high-profiled products that require flexibility and speed of product development.
ECCO will retain 260 high-tech production and development jobs at the site in Santa Maria de Feira, in the northern part of Portugal, which once employed up to 1,400 workers. ECCO has decided to strengthen certain group functions there such as the production of advanced high-profile items on a single production line, the technical development of certain products and materials testing, automation of unique production processes, prototyping and technical support for other ECCO units around the world.
Since 2000, about half of the capacity installed by foreign companies in Portugal has been dismantled because of rising costs. On the other hand, ECCO is not moving it to its new facilities in China, which are now producing mainly for the Asian market. Reports indicate that the company may reassess the schedule of its investments in China if any form of protection is reinstated.