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. ®