Nokia Agrees to Term for German Plant Closure

April 8, 2008
Severance package of $314 million

Nokia, the world's leading mobile phone maker, announced an accord with employees on April 8 on the closure of its plant in Bochum, Germany, including a severance package of 200 million euros (US$314 million). The deal set June 30 as the closure date.

"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, calling the deal a "a fair, reasonable and satisfactory solution for all."

Nokia's decision in January to close Bochum raised howls of protest in Germany, where 2,300 jobs were expected to be lost at the plant and with local sub-contractors also expected to be hit. Nokia plans to shift production to Romania where labor costs are lower.

Shortly after announcing the closure, Nokia posted record results for 2007, further tarnishing the group's reputation in Germany, where calls multiplied to boycott its products. The German state of North-Rhine Westphalia (NRW) has demanded Nokia pay back 41 million euros (US$60 million)of subsidies it received for the plant in the late 1990s. Nokia has rejected that call.

Copyright Agence France-Presse, 2008

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