euro|topics - Nokia closes plant in Germany

05/07/2009

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Main focus of Friday, January 18, 2008

Nokia closes plant in Germany

Finnish mobile telephone manufacturer Nokia has announced that it will close its plant in Bochum. The jobs are to be shifted to Romania and Hungary. This step has triggered criticism, particularly as the corporation had received a subsidy of 88 million euros for locating the works in North Rhine-Westphalia.

Neue Zürcher Zeitung - Switzerland

Peter Rasonyi criticises Jürgen Rüttgers, Prime Minister of the German state North Rhine-Westphalia, who had called Nokia a "corporate raider of subsidies". "Strategic location decisions are always business decisions which the corporations must take. Public policy can make the framework conditions as attractive as possible by means of taxes, infrastructure, regulations and educational efforts. But if a company decides upon a different location anyway, then that is just as legitimate as it is necessary for an efficient, competitive economy... In fact, this case provides further evidence that state subsidies are nonsense. If the conditions at a particular location are structurally unfavourable, then, in a competitive situation, decline can at best be delayed. This impedes the emergence of new structures, and is ultimately disadvantageous to the workers whose layoff is just postponed." (18/01/2008)

die tageszeitung - Germany

Even if shifting jobs from Bochum to the Romanian city of Cluj is painful for those affected, Daniela Weingärtner believes that we should not dismiss the EU's policy on subsidies: "Should the EU abandon its goal of harmonising the standard of living in all its Member States? That would mean that wages and working conditions would remain dreadful in Romania in the long term. That would be disastrous for the entire EU – not just from a moral perspective, but also from a social one. For in a single market, businesses are always attracted to the locations where wages and additional expenses are lowest. So it must be in the interest of German trade unions and German politicians that Eastern Europe can catch up as rapidly as possible – also with the support of European support programmes. It is self-evident that industry relocation must not be subsidised. In any case, the funding guidelines exclude it." (17/01/2008)

Hufvudstadsbladet - Finland

The plant closure in Bochum will have consequences for the entire corporation, warns Björn Sundell. "Such decisions are problematic regarding morale in large international corporations. If profitable units are closed, even, as in the case of Nokia, highly-automated plants during a boom, then the employees will wonder whether it's even worth it to work hard and make sacrifices – if in the end, that still isn't enough. Corporations should deliberate such steps carefully, irrespective of the cost of wages. Insecurity doesn't exactly help boost motivation at other sites, and fear doesn't increase loyalty. After all, nobody knows who will be next." (18/01/2008)

» To the complete press review of Friday, January 18, 2008

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