Clothes Connection to Relocate from O.C. to Mexico

After two years of contending with a plethora of labor and immigration problems, Clothes Connection, a large garment maker that caters to Wal-Mart Stores Inc., is planning to shift productions to Mexico.

At its peak, the company employed nearly 2,000 workers in a 360,000-square-foot plant in Santa Ana’s Enterprise Zone, a designated area that provides businesses tax credits and other incentives.

But in recent months the apparel maker, also known as California Connection, has sharply curtailed its operations in preparation to relocate to a new factory in Tijuana, according to government officials. Earlier this year, the work force had dropped to below 500 people.

The move is part of a continuing trend of domestic garment businesses moving production to Mexico since the passage of the North American Free Trade Agreement, which eased trade barriers.

“That’s not shocking news,” Joseph Rodriguez, head of the Garment Contractors Assn. of Southern California, said of Clothes Connection’s plans. He added that more garment manufacturers are likely to follow suit with the anticipation of the passage of a higher minimum wage.

“The continuing wage pressures and the added pressure with scrutiny on sweatshops and compliance--it’s not a business-friendly atmosphere,” he said.

Managers at Clothes Connection did not return telephone calls Monday, and it was unclear when the company would shut down productions in Santa Ana, where it has been operating since late 1993 in a rental property at 2001 E. Dyer Road.

Brad Schroth, an Irvine commercial real estate broker, said Monday that Clothes Connection has about two years left on its lease. But he said the company is likely to clear out of Santa Ana within six months, by which time Schroth expects to sell the property.

Keith Morris, a spokesman at Wal-Mart, did not comment on Clothes Connection’s plans, but noted that Wal-Mart, the nation’s No. 1 retailer, makes a strong effort to stock products made in the United States. But he also said that Clothes Connection’s past shipments to Wal-Mart have been a mix of clothes made from California and Mexico.

Clothes Connection plans to maintain a shipping and distribution center in California, according to real estate agents and government officials. But company managers have told them that production in Santa Ana was not viable for economic reasons and because of the endless headaches they have had on matters of immigration and labor.

Earlier this year the U.S. Immigration and Naturalization Service proposed fines of $440,000 against Clothes Connection for a number of alleged violations, including failure to complete forms verifying the legal status of 450 employees and incomplete paperwork for an additional 350 workers.

The INS inspections, which date back to early 1995, have forced the company to dismiss hundreds of workers. Clothes Connection has maintained that it has not knowingly hired any illegal workers, and the company has indicated that it would appeal the fines.