Nokia faces Eur60m bill for plant closure
13 March 2008
Nokia faces Eur60m bill for plant closure
Finnish handset vendor Nokia in understood to be looking down the barrel of a Eur60m bill, following its controversial decision to close its German manufacturing plant.
In January, Nokia sparked a political backlash over plans to close its handset manufacturing plant in Bochum, Germany and make up to 2,300 workers redundant.
The company said that it will discontinue the production of mobile devices and close its Bochum site by mid-year.
But authorities of the regional state of North Rhine-Westphalia, which includes Bochum, are understood to have told Nokia to return almost Eur60m, handed out in subsidies and investment payments. Germany is arguing that part of the requirements were for Nokia to create 2,900 'permanent' jobs at the plant.
Instead, the company said it will transfer the manufacturing operation to cheaper Romania.
The situation is likely to make it to the courts, and is being watched with interests as it could set a precedent on subsidies handed out to overseas companies.
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