Nokia getting slammed in Germany over job losses

Plant closure turns into political hot-cake

21 January 2008 11:22 GMT / By Katie Scott

Nokia's announcement last week that it to slash thousands of jobs in Germany has resulted in a national backlash.

As we reported, the mobie maker said that the decision to shut down the plant in Bochum was because it was no longer competitive.

It said that production was to be moved to Romania.

The move immediately drew criticism from German trade unions but now German politicians have waded into the debate.

Reuters reports that the German finance minister accused Nokia of "caravan capitalism" while other politicians vowed to replace their Nokia phones.

A government spokesman said Chancellor Angela Merkel had no plans to give up her Nokia phone, but added she understood the reasons for the boycott calls, added Reuters.

"This is the expression of a caravan capitalism which systematically undermines support for this economic and social system", Finance Minister and Social Democrat Peer Steinbrueck told German radio.

"People are losing confidence and that is extremely dangerous and of political importance", he said.

Some politicians have gone as far to suggest that Nokia should repay subsidies it received in the 1990s when it set up in Germany.

Reuters reports: "A deputy economy minister in the region when the job losses are to take place said the state may have grounds for pushing Nokia to return up to 40.8 million euros of subsidies given on condition the firm employed 2,800 people".

However, other politicians are more sympathetic of Nokia's decision.

Government economic adviser Peter Bofinger said subsidy abuse should not be tolerated but insisted closures were normal.

"Jobs are cut and shifted elsewhere - this is part of normal market developments, even if it is a hard blow in this case", he told the Saarbruecker Zeitung newspaper.

In the meantime, talks are taking place between the German Economy Ministry and Nokia officials in Berlin, but no details of the outcome of the talks have been published.

Nokia is also not commenting.

Full tags

Biz, Phones, Mobile phone industry, Nokia