Nokia agrees to pay $314m to drop German plant
updated 02:40 pm EDT, Tue April 8, 2008
Nokia Pays 314m
Nokia on Tuesday said it has agreed to pay a total of $314 million to compensate for its planned factory shutdown in Bochum, Germany. The deal will let Nokia shutter the reportedly unnecessary plant on its original June 30th timetable but help accommodate the 2,300 workers belonging to the plant. A transfer company will be set up to accommodate the workers and help them transition to new jobs.
The Finnish company's plant has been contentious since its foundation several years ago, as the German town has accused Nokia of failing to live up to requirements to create a minimum number of jobs in return for up-front payments to locate the factory in the area. Nokia in turn has rejected the accusations and claims that manufacturing phones at the plant is much more expensive than at all its other facilities.
Nokia is looking into moving its production to other areas with lower labor costs, including China.
