Brussels, 17/01/2008 (Agence Europe) - The world leader in mobile phones, Finnish giant, Nokia, announced on Tuesday 15 January that it would be closing its factory in Bochum, Germany, which employs 2300 workers. 1800 of these workers work directly in production and 500 in technical support, research, development and training. Nokia said that the decision was due to the site's lack of competitiveness. Labour and production costs in Germany were too high for Nokia to be able to obtain satisfactory profits, explained a company spokesperson, Arja Sunimen, who added: “Germany is a country where labour and production costs are in general too high”. Production has therefore been transferred to Clug in Romania, a country that offers much lower wage costs. Nokia's R&D unit is in buy-out negotiations with the Indian company Sasken. Nokia will now focus its European production in Finland, the United Kingdom, Hungary and Romania, where the new company will soon be opened.
Commission provides assurances that no European subsidies were paid
for relocation or transfer of this company
The most intriguing question at the moment is whether Romania benefited from European Structural Funds to attract such investments. Eva Kaluzynska, the spokeswoman for the European commissioner for regional policy, Danuta Hübner, categorically denied this in a press statement made on Wednesday in Brussels: “No, Structural Funds were not paid out. No subsidy was used for the relocation or transfer of this company to Romania”. The spokeswoman affirmed: “We are currently gathering together different aspects to this question, including the very important social aspect”. She pointed out that this clause had been introduced into the 2007-13 competitiveness programmes and banned the granting of such funds. Kaluzynska indicated that “the Commission is therefore confirming that no subsidies were paid out”. She added that the Commission was scrupulously checking whether Romania benefited from PHARE funding (economic action aid programme for Central and Eastern European EU accession candidate countries).
The spokeswoman again underlined the fact that the Commission is “currently providing a detailed examination to see whether other EU funds are involved or not (but to our knowledge they aren't) and whether the affair falls under the scope of the European Globalisation Adjustment Fund”. Infrastructure set up in Clug covered by the Nokia Village name will benefit from PHARE assistance. Kaluzynska said that “a few years ago, this kind of funding was programmed for this infrastructure, but then we did not know what company would benefit from this infrastructure”. She added that “the amount for this infrastructure, which Nokia will benefit from, is being examined by the Commission”. In reply to questions about whether national incentives were paid by the Romanians, Eva Kaluzynska explained, “in terms of state aid, the Commission did not receive any notification from Romania in this sense, but it cannot be ruled out”.
The spokeswoman stated that in connection with the social aspect to this closure, “the Commission is aware of the number of job losses. The commissioner for social affairs, Vladimir Spidla, is involved in helping those who lost their jobs find work through the European Social Fund”. She also noted that “€9.38 billion is available in this connection for Germany. The Commission underlines the importance of Community rules in the event of job losses and social dialogue here is of the utmost importance”.
European Metalworkers' Federation asks for consultation with unions
and national and European works councils
In a statement made in Brussels on 16 January, Peter Scherrer, Secretary General of the European Metalworkers' Federation (EMF) described this closure as “a slap in the faces of employees and local people”. He declared: “According to the information we have received so far, this would represent a blatant violation of the European works councils' directive”. In the press statement Scherrer warned that the EMF would scrutinise the case from a legal point of view and, if necessary, Nokia would have to prepare for the repercussions and legal ramifications caused by this decision. The EMF will look at whether the transfer of production, encouraged by such a decision, would benefit from European financial aid. Mr Scherrer added: “We call on the management to enter into talks immediately with the unions concerned, the national works council and the Europeans works council”.
Nokia employs more than 65,000 people in several regions of the world. It has factories in Brazil, China, South Korea, India and Mexico. With 38% of market share, the company announced in an article in the French daily, Le Figaro, its forecasts for very optimistic results for this year. Operations profits are expected to be between 16%-17% of its 2008 turnover (as opposed to 15% initially forecast). According to Nokia CEO, Olli-Pekka Kalasvuo, the number of users is expected to reach 4 billion in 2009. (G.B.)