Nokia Settles German Factory Subsidies Row
Nokia has announced a package of economic measures to assist former employees at its German handset factory in Bochum - and that it has closed the issue of subsidies paid when it originally opened the factory. Nokia, the State of North Rhine-Westphalia (NRW) and the City of Bochum jointly unveiled their plan to stimulate growth, create new jobs and generate investment for Bochum and the neighbouring cities.
In January, Nokia announced it would shift production from Bochum to Romania due to lower labor costs. The firm's decision sparked massive protests in Germany, where 2,300 jobs were expected to be lost and local subcontractors are also expected to be hit.
The state of North Rhine-Westphalia has also been seeking the reimbursement of subsidies of some EUR60 million provided in the late 1990s for the plant in Bochum, scheduled to be shut down in June.
The three parties to the agreement will set up an "Entrepreneur Centre" in Bochum, fund an advertising campaign to promote the are and find a suitable buyer or investor for the Nokia facilities in Bochum.
Nokia will support these measures by contributing the sum of 20 million euros plus the net proceeds from the sale of Nokia's production facility and property in Bochum. NRW will also contribute a co-investment in the amount of 20 million euros.
"We said in January that, as a responsible company, we would work together with the employee representatives, unions, NRW Government and City of Bochum to find ways to support employees and Bochum's future growth both during and after the difficult process of closing the factory. We are pleased to now announce this important milestone," said Nokia Chief Financial Officer and Executive Vice President Rick Simonson.
The City of Bochum also welcomed the outcome of the negotiations. "It is not easy for Bochum to deal with the loss of Nokia. However, I am pleased that we will receive strong support from Nokia and NRW in the search for investors and in identifying new job creation opportunities," said Bochum Mayor Dr. Ottilie Scholz.
As part of the plan Nokia and NRW have also discussed the issue of the subsidies paid to the company in the late 1990s and both parties now consider this issue closed.
Posted to the site on 3rd July 2008
