WASHINGTON, D.C. - U.S. Sen. Sherrod Brown (D-OH) today announced that he intends to chair a hearing of the Subcommittee on Economic Policy on the role of private equity firms, U.S. manufacturing capacity, and the factors involved in the decision to close the Hugo Boss manufacturing facility in Brooklyn. The hearing will take place in late April.
In December 2009, Hugo Boss announced it plans to close the last remaining U.S. suit manufacturing facility. In February, Senator Brown requested that Hugo Boss and the private equity group Permira, which holds majority ownership of Hugo Boss, revisit the decision. In the letter, Senator Brown wrote, "I have grave concerns when hearing stories of private equity firms such as Permira loading their portfolio companies with debt, closing U.S. production facilities, and reaping high returns - all at the expense of American workers. Such behavior has played a significant role in creating the challenging economic climate our nation currently faces."
The Ohio Public Employees Retirement System (OPERS) is a limited partner in Permira investments. In February, OPERS wrote Permira expressing serious concern about the Hugo Boss plant closing. On February 16, 2010 the OPERS Board heard statements at its regular Investment Committee meeting from a 10-year Hugo Boss employee, as well as from labor representatives of the workers at the plant.
Brown plans to use the hearing to examine the concept of "short-termism" in financial markets and how to create public policies that reward long-term economic growth.