Nokia closes plant in Germany and relocates in Romania

The German government urged Nokia to reconsider closing a plant in Germany, with many job losses and the facility’s relocation to Romania. According to the ETUC, the Finnish management of the world-leading mobile phone producer announced the abolition of 4,000 jobs without the slightest information or consultation.

Germany’s Economy Ministry said it was ready to hold “intensive discussions” with the Finnish phonemaker over the closure, and had threatened to bloc European Union aid for the relocation. However, the EU Commission said Nokia would not receive any.

Nevertheless, the premier of North-Rhine Westphalia (NRW), the state where the factory is based, attacked Nokia for the move and said it risked appearing a “subsidy locust.”

Arguing the plant was not competitive enough, Nokia said on Tuesday it could cut up to 2,300 staff as it moves production to lower-cost areas, largely to EU newcomer Romania — a country which receives aid from the bloc partly supplied by Germany.

In a statement, Deputy Economy Minister Hartmut Schauerte said he regretted that Nokia, the world’s top cellphone maker, had not been able to profit from Germany’s global competitiveness despite receiving state assistance.

But he hinted the government might be prepared to make concessions if German jobs could be saved.

“The German government is in permanent contact with the company and is ready for intensive discussions if the company is prepared to reconsider its decision,” Schauerte said.

Schauerte added that EU structural funds should not be used to finance the move, but officials from the EU’s executive, the European Commission, said this would not happen.

“That would be unfair competition,” Commission President Jose Manuel Barroso told the European Parliament.

Nokia, which aims to close the plant in the western city of Bochum by mid-2008, said it was ready to discuss its plans.

However, when asked if these plans could be altered, Nokia spokeswoman Arja Suominen said: “As I said, our decision is based on careful consideration and facts. We have simply come to the conclusion that Bochum as a location is not competitive.”

Commission spokeswoman Eva Kaluzynska said Romania had agreed not to use EU aid in the 2007-13 period to help finance the relocation of a plant from another member state.

However, she added that an industrial park where Nokia was based in Romania probably was financed partly by the EU’s pre-accession fund before the Black Sea country joined the bloc.

The 12, mostly ex-communist new member states are due to receive close to 200 billion euros ($296.6 billion) in EU regional aid in 2007-2013. Romania joined in 2007.

Juergen Ruettgers, conservative state premier of NRW, told television station ZDF Nokia had received over 80 million euros in German public funding for the Bochum plant.

Ruettgers added Nokia risked being seen as a “subsidy locust” and that this could damage the company’s image among Germans — more than one in five of whom live in NRW.

The word “locust” rose to prominence in German political debate in 2005 when former SPD leader Franz Muentefering used it to characterise irresponsible financial investors.

NRW’s Economy Minister Christa Thoben told ZDF the state was investigating whether Nokia had honoured its side of the bargain for getting subsidies — or if NRW had the right to a refund. Nokia’s Suominen said the firm had fulfilled its terms. Unions have vowed to resist the closure in Bochum, where workers blocked access to the site on Wednesday in protest. German industrial union IG Metall said more than 4,000 jobs in total could be lost if the plant leaves Germany.

(By Dave Graham (Reuters) Additional reporting by Marcin Grajewski and Ilona Wissenbach in Brussels, and Sami Torma in Helsinki)

ETUC: Nokia shows the importance of urgently reviewing the EWC Directive

Without the slightest information or consultation, the Finnish management of the world-leading mobile phone producer Nokia announced the abolition of 4,000 jobs. This, according to Reiner Hoffmann, Deputy General Secretary of the European Trade Union Confederation (ETUC), demonstrates the urgent need to revise the EU directive on European Works Councils (EWCs).

In particular, it must be guaranteed that companies cannot ride roughshod over European and national workers’ rights without sanctions. In any case it must be guaranteed that no layoffs or transfers can be carried out without prior thorough information and serious consultations with the workers’ representatives and their trade unions. The ETUC has welcomed the Commission’s introduction of the revision of the EWC directive. It must now come quickly to a conclusion.

The EU Commission can thereby make a meaningful sign that it is not only concerned for a better business environment but that it also has the power to strengthen worker’s rights across Europe.

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