Nokia shutters German handset factory
Nokia is shut down its Bochum plant in Germany by mid 2008. The closure will affect at least 2,300 Nokia employees, the company said today.
Veli Sundbäck, executive vice president of Nokia and chairman of the supervisory board of Nokia GmbH, says production of mobile devices in Germany is no longer feasible due to market changes and requirements for cost-effectiveness.
Nokia Werke in Bochum was founded 20 years ago and was one of the firm's major plants outside Finland. The Finnish company will move most of its production capacity to a new plant at Cluj, Romania, and a plant at Komarom, Hungary. The manufacturing operation at Salo, Finland, will continue to make advanced products.
Nokia will sell its automotive components business and research labs to Sasken Technologies, an embedded communications solutions company which employs more than 3,500 people. The automotive business is still profitable.
Nokia's Line Fit Automotive Business supplies car factories with wiring needed for car owners to use their phones hands-free. Nokia started selling car telematics products as early as 1998. The Bochum site became the main hub of R&D activities in Nokia Smart Traffic Products.
The Nokia plant in Bochum is the biggest local employer after Opel. Hannelore Kraft, opposition Leader of the SPD, told German papers it is a black day for the state of Northrhine-Westphalia.
Germany no longer seems to be a profitable place for the production of mobile equipment in general. Last year, Nokia Siemens said it would cut 9,000 jobs - about 15 per cent of its total staff - over the next four years as part of a programme to save the combined company €1.5bn annually by 2010. In Germany alone, 2,900 jobs will have to go. ®
Nothing insane about this.
Stop being a child. What Nokia did is perfectly legal, and the insanity of the german labour system (with workers councils that have ultimate approval rights for absolutely everything) is a total disincentive for any company to employ significant amount of staff in the country.
If the contract ran out in 2006, then the company has had ever since that time - complete right to decide what to do with its operations. I am surprised they did not move sooner.
I also think you are grossly exaggerating the effect of any boycott campaign in Germany, which will no doubt dry up in a week or two, after the politicians have had their fieldday in the press.
Nokia, as any company, is constantly trying to drive their production costs down, especially as the demand for low- and midcost phones is growing. One part of this is to look for locations with the cheap labourcosts for production tasks.
With regards to the subsidies, I would assume (depending on how long the contract period was), that Nokia paid considerably more back to the Germany society through taxes, social fees and salaries to the employees. It was a lucrative, although not a permanent, arrangement for Bochum.
This company is reckless. They would stop at nothing!
Boycott Nokia mobile phones! Stop these insane managers!
They collectet in total 88,000,000 EUROs of subsidies for the factory in Germany. Since the contract ran out in September 2006 they looked for new subsidees in other countries. And they finally found a 33,000,000 EURO-subsidy in Romania paid by the EU-Council. And this is the only reason why they go there, nothing else. It is really unbelievable a company can ruin the future of 4000 people and their familes like that.
Currently there is a boycott going on all over Germany. The sales of Nokia mobile phones and other equipment went down drastically. And Germany is a very important market for Nokia, since they have a market share of tremendous 60% there !!! Now they will lose many clients among the 82,000,000 Germans. Figure out the losses! The stock price will be affected certainly. So better get rid of them very quickly.
By the way, the plant in Germany is very profitable and there is no reason to shut it down. Nokia claims the wages in Germany are much higher than in Romania - this very exagerated. But another fact is way more interesting: The labour costs make only a 5% of the total production costs!! Nokia is only going for profit which will come mainly through the subsidies. Really disgusting! So please:
Boycott Nokia! Stop buying mobile phones from Nokia!
Typical Eastern European rubbish
Like everything it's either going to China or to Eastern Europe (where the line workers are paid in chickens). When they said they were moving manufacturing to Eastern Europe I thought they meant the UK, as that's where most of them live now. Nice to see them taking jobs off those other than the Brits for a change. I won't be buying Nokia out of principal now, especially as the build quality is set for a nose dive. Nobody builds better than the Germans.