Nokia Agrees Terms for German Plant Closure | Business| Economy and finance news from a German perspective | DW | 08.04.2008
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Nokia Agrees Terms for German Plant Closure

Finnish mobile phone company Nokia said it has reached a 200-million-euro severance agreement ($314 million) with employees at its Bochum plant, which is due to be closed in June.


Announcement of the plant closure sparked bitter employee protests

"Nokia and Bochum employee representatives have agreed on key elements of a reconciliation of interests and a social plan for employees affected by the plan to close the site," the Finnish group said in a statement, calling the deal a "a fair, reasonable and satisfactory solution for all."

The deal set June 30 as the closure date for the Bochum plant. After that, Nokia will set up a "transfer company" where employees would be offered work for up to one year.

In January, Nokia announced its intention to close the plant and move production to Romania to take advantage of lower labor costs. The move will cost some 2,300 German employees their jobs.

Germans outraged by closure

Shortly after the announcement was made, Nokia posted record profit results for 2007, which only increased outrage in Germany, where calls abounded for consumers to boycott the company's products.

The German state of North Rhine-Westphalia is demanding that Nokia pay back the 41 million euros in subsidies it received for opening the Bochum facility in the late 1990s, but so far, the company has rejected that call, saying it played by the rules.

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