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Nokia cuts 4,000 smartphone factory jobs, moves them to Asia

updated 08:30 am EST, Wed February 8, 2012

Nokia moves smartphones to Asia to cut costs

Nokia showed the toughening conditions of the smartphone field on Wednesday after it detailed plans to cut 4,000 manufacturing jobs. Positions both in its home territory factory in Salo, Finland, as well as in Komarom, Hungary and Reynosa, Mexico, would be eliminated by the end of 2012. Smartphone production would be moving more towards Asia, where it wouldn't just be cheaper to make devices, but faster.

"Shifting device assembly to Asia is targeted at improving our time to market," executive markets VP Niklas Savander said. "By working more closely with our suppliers, we believe that we will be able to introduce innovations into the market more quickly and ultimately be more competitive."

The swap makes Nokia's production closer to those of competitors like Apple, HTC, and Samsung, and is also an admission that its shrinking smartphone base could necessitate consolidating its production. Nokia has often been accused of unnecessarily long delays between announcing and shipping smartphones, in some cases not delivering until several months later. The Lumia 800 arrived within weeks of being ready at relatively low prices, and the Lumia 900 should be both on US shelves within two months and possibly one of the most affordable LTE phones in the country.

The move is still likely to raise complaints about the reduction of manufacturing and the middle class in the West, where Nokia was a rare exception.



By Electronista Staff
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Comments

  1. BigJohn11

    Fresh-Faced Recruit

    Joined: Oct 2010

    +6

    I'm waiting for the complaints

    The reality is until pressure is put on the industry as a whole, things will not change. Singling Apple or any other company does not do any good. Just look at foxconn on wiki and you will see that they make MANY products that we use and like(xbox, ps3, TVs, etc).

    I continue to say that the US or any country losing manufacturing should work with companies like Nokia or Apple to set up small factories to figure out what the challenges are. h*** we have a whole city(Detroit) which has tons of people and empty space ready to make things again. Even as a football fan, I am frustrated that a city can raise money for "Jerry World at 1 billion" and not spend money to keep people employed. Why is it that we look at the two so very differently?

  1. SwissMac

    Fresh-Faced Recruit

    Joined: Aug 2006

    +5

    Is Nokia Finnished?

    Poor Nokia. So are the mighty fallen.

  1. climacs

    Forum Regular

    Joined: Sep 2001

    +2

    @BigJohn

    Amen re: the first paragraph of your comment. I usually admire Bill Maher but last Friday I wanted to kick him in the junk for his rant about Apple. Hello, Mr. Know It All: Apple is NOT the only company making its products in Foxconn factories. But of course, it's cool to bash Apple so only Apple gets mentioned in your self-righteous rant. Not Dell or HP or Lenovo (I guarantee you that Lenovo doesn't give two shts about the worker conditions in the plants making their PCs)

    As for the 2nd part of your post... we already know what the challenges are. Even if you abolished every union in an instant, you could not get any American to work for Chinese wages. We have a higher standard of living, much higher than in China. Chinese factory workers can work so cheaply because as bad as Foxconn factories might be, it still beats working on a Chinese farm, and these Chinese don't have anything close to our standard of living.

    There is no way to bring that manufacturing back to the US, unless we drastically lower our standard of living. But don't worry, the GOP is working overtime to make that happen.

  1. Inkling

    Dedicated MacNNer

    Joined: Jul 2006

    +4

    Not Detroit

    It makes little sense to compare Detroit, "which has tons of people and empty space ready to make things again," with China. Manufacturing is more that bodies and buildings.

    It's no accident that car making has abandoned Detroit. Meddling, whining unions, corrupt politicians, a decaying infrastructure, welfare-induced laziness, and dull-witted executives combined to destroy the city's manufacturing base. Baring a massive and unlikely cultural change, it isn't coming back.

    In other parts of the country, particularly the South and Southwest, the America knack for making things remains strong. But that's for making things like cars with relatively long turn-around times. The problem, as the article notes is making products not just cheaper but faster.

    Foxconn can set off alarms in their dorms and get their work crews at work in the middle of the night. It can, despite claims to the contrary, require 60+ hour weeks from a young work force that, temporarily, can take a lot of abuse as long hours and repetitive labor. We can't regiment like that, so we'll need to come up with something that works as well.

    Go to the huge Kia factory near LeGrange, Georgia, and you'll see something else that's needed. There a rail line parallels and Interstate for miles. The rail brings raw material in, the highway takes the cars away. For miles on either side of that factory are companies that have subcontracted to build parts for those cars. It's all very fast and efficient.

    We can build cars in this country as efficiently as in Asia. What we can't do is build electronic devices. The huge infrastructure to do so, from making the parts to assembling them, migrated to Asia in the 1960s.

    What speciality electronics industry that remained n the U.S. has been trashed by the stupidity of our politicians. Strange as it sounds, NYC used to have an electronic manufacturing industry. It was destroyed for a city prestige project, the Twin Towers. Marginal businesses can't survive a relocation, particularly with the pittance paid out under eminent domain.

    Years ago, I visited an electronics parts supplier just north of downtown Seattle. They had a sign up denouncing a Paul Allen-funded scheme to turn the South Lake Union region into a boutique business area. "Why are you doing this?" I asked. "That's several miles away." They replied that the 'renovation' would drive the low-profit margin electronics companies they suppled out of business. Which is precisely what it did.

    Some of our problems can be traced to greedy unions and anything for a quick profit executives. But much of the blame can be placed on politicians and urban planners who regard manufacturing as too crude and primitive for their elevated tastes. They prefer to bring in financial services, and we saw how wise that was in the financial/lending/banking meltdown of a few years ago.




  1. prl99

    Dedicated MacNNer

    Joined: Mar 2009

    +2

    clarification

    China is an electronics assembly nation comprised of a huge workforce. Many/most components of Apple products are not manufactured in China but they are assembled there. I read this in an article months ago when this same topic came up. As for the US being "able" to build cars better than in Asia, we already do. Toyota is the largest auto manufacturer in the US--not Ford or (cough!) GM. I would be careful comparing auto manufacturing to the electronics industry. I can't confirm this but I bet when GM was resurrected from the grave, they went out and re-tooled their factories, installing lots of robots. I would really like to know how many people they re-employed. Many stages of electronics are also automated but some still require hand assembly, an extremely monotonous procedure but something many Americans already perform in US factories. It's also way too easy to blame unions (I agree about corrupt politicians) as the cause for a poor work environment but it goes further than that, right to the greed of investors, banks, politicians, AND you and me.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    -6

    but

    Apple, as you all like to say, rules the world in electronic devices and products and has all the profits and margins and everyone else is going under.

    So, who would listen if Dell or Nokia says "You guys need to get better or we're leaving!" Wow, that's like 20 jobs lost in China.

    But Apple has the size and the power (and the money) to make a stand, if they cared to. They apparently care as long as it doesn't cut into the bottom line or reduce their market share. And that's their right (since they are a company, their job is to make cash).

    But you can't go around talking about how Apple is so much better than all these other companies (like MS or Google or the like) because they 'care', when, in fact, they don't care any more or less than any of the others.

  1. RoboBobo

    Fresh-Faced Recruit

    Joined: Nov 2011

    +2

    yes, but

    "where it wouldn't just be cheaper to make devices, but faster."

    making them faster, is hardly a concern for Nokia

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