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BERLIN An influential German state governor voiced anger Wednesday at Nokia
Corp.s decision to shut a manufacturing plant, dismissing its argument that
costs are too high and warning that the move could damage Nokias image in
Germany.
Regional officials also said they would examine whether it was possible to
recoup state subsidies granted to Nokia, the worlds biggest cell phone maker.
Nokia on Tuesday announced the closure of the Bochum plant in the industrial
Ruhr region with the likely loss of 2,300 jobs. It cited the locations lack of
competitiveness. A Nokia official said labor costs in Bochum were nearly 10
times those at another plant in Romania.
I am very angry, above all about the way this happened, Juergen Ruettgers,
the governor of North RhineWestphalia state, where Bochum is located, said on
ZDF television. So far, there is no comprehensible reason why this decision
was made.
We are not simply going to accept this this is not yet the end of the
debate, he added.
Ruettgers denied that German labor costs were too high, arguing that they
account only for a very small proportion of overall costs.
Nokia must think over what it has done here, said Ruettgers, a deputy leader
of German Chancellor Angela Merkels conservative Christian Democrats. The
German market for cell phones is one of the biggest in the world.
Pointing to public subsidies granted to the company more than ㉐ million
(US$119 million) in total, according to his state government Ruettgers said
that the closure could lead to significant damage to its image and that we
are checking whether there is any chance of recouping subsidies.
Hartmut Schauerte, a deputy federal economy minister, said that Germany is
globally competitive. He said in a statement that the government in Berlin was
in contact with the company and was open to talks were the company to be
prepared to think over its decision.
Schauerte said Germany and the European Commission would check whether a shift
in production was being subsidized by EU structural funds that must not
happen.
Espoo, Finlandbased Nokia argues that it already has done its best to make the
plant competitive.
Over the past years, we have tried again and again to improve the
competitiveness of the Bochum plant, board member Veli Sundbaeck said Tuesday.
Nokia, which has increasingly concentrated on emerging markets, last month
predicted that the highest growth in the global mobile market in 2008 of more
than 15 percent will be in the AsiaPacific region, China, the Middle East
and Africa. The lowest growth of less than 10 percent will be in North
America, Europe and Latin America, it said.
Nokia has sales in 130 countries. It employs some 130,000 people worldwide. It
scheduled to release its fourth quarter and 2007 earnings on Jan. 24.
Shares of Nokia were down nearly 1.6 percent to $23.19 (US$34.30) in trading in
Helsinki.
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Source: http://www.communicationsdirectnews.com/do.php/120/28630
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