Dainese, the Italian producer of motorcycle suits and snow sports protection equipment, is moving production currently carried out in Italy, at its site of Molvena near the town of Vicenza, to its two manufacturing plants in Tunisia.

The group is also terminating the production of top-tier motorbike suits, which were manufactured in Italy. The suits, whose price tag started around €2,500, no longer had a market following a sharp drop in demand prompted by the economic recession.

In 2009, Dainese’s total sales dropped by a quarter compared with the €105 million booked in 2008. The company generates about 85 percent of its revenues from motorbike equipment and the remainder from winter sports and outdoor equipment.

The group has reached an agreement with the unions to lay off 120 people in Italy, largely blue-collar workers, who will benefit from a government-managed unemployment fund for a year. At the end of the 12-month period, about 80 people are expected to be permanently fired. The Dainese group employs about 500 people overall in Italy and Tunisia.

In June/July, the company expects to start manufacturing in Italy a new line of suits equipped with airbags. The suit took about a decade to develop and the group feels that it now ready to go into production. However, manufacturing levels are initially expected to be low and limited to tailor-made products and on-demand orders.