Nokia today announced plans to discontinue the production of mobile devices in Germany and close its Bochum site by mid-2008. The company plans to move manufacturing to its other, more cost-competitive sites in Europe.
As a consequence of the planned shift of production from Bochum to other European sites, Nokia also intends to discontinue other non-production activities at the Bochum site. In conjunction with the announced plans to close its Bochum site, Nokia is also announcing plans to sell its line fit automotive business and it is in negotiations with Sasken Technologies to sell the Bochum-based adaptation software R&D-entity.
The planned closure of the site in Bochum is estimated to affect approximately 2,300 Nokia employees.
Nokia’s decision to discontinue manufacturing in Bochum is based on the lack of competitiveness of the location. Renewing the site would require additional investments but even this would not result in manufacturing in Bochum being globally competitive.
“The planned closure of the Bochum production site is necessary to secure Nokia’s long-term competitiveness,” said Veli Sundbäck, Executive Vice President of Nokia and Chairman of the Supervisory Board of Nokia GmbH. “Due to market changes and increasing requirements for cost-effectiveness, production of mobile devices in Germany is no longer feasible for Nokia. It cannot be operated in a way that meets the requirements for global cost efficiency and for flexible capacity growth. Therefore we have to make this tough decision.”
Nokia will start the consultations with the employee representatives as soon as possible in order to to reach a satisfactory solution for all parties concerned. The financial costs associated with this restructuring will be determined along with the consultation process and reported in Nokia’s quarterly reporting for 2008.
Source: NOKIA PRESS RELEASE