Nokia to Reimburse German State in Plant Closure Dispute

BERLIN (AFP)--Nokia will reimburse a German state over EUR1.3 million to resolve a plant closure dispute that has cost the mobile phone giant tens of millions already, officials said Saturday.

Nokia will pay out the sum plus interest to North Rhine-Westphalia after announcing earlier this year it was closing down its last plant in Germany in the town of Bochum.

According to the economic weekly WirtschaftsWoche, the German research ministry had given Nokia EUR4 million in grants to finance its factory in Bochum, which is in the heart of the industrial Ruhr basin.

The fruits of Nokia's research should have benefitted Germany but will not after the Finnish phone maker closed Bochum, according to the ministry.

To try to settle the dispute, Nokia had already started a EUR20 million "Growth for Bochum" foundation providing capital for entrepreneurs in the mobile telephone and information technology sectors.

Nokia announced in January 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 were also expected to be hit.

(END) Dow Jones Newswires

Posted to the site on 26th July 2008