Nokia offers Bochum workers massive social package

Accommodation also expected on state industrial subsidy payback issue

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On Tuesday, the electronics manufacturer Nokia announced that it had reached agreement on a compensation package for over 2,000 workers for the closure of the mobile telephone factory in the German city of Bochum.
      The agreement is not coming cheap. The "social package" was said to be worth EUR 200 million.
      The figure includes both direct monetary compensation for the workers, as well as the costs emerging from a "transfer company" that is to be set up to employ and train the workers for up to a year as of July this year. The aim of the company is to make it easier for the former Nokia workers to find new jobs.
      The Bochum factory will close down permanently on the 30th of June.
      An experienced older worker will get nearly EUR 200,000 in compensation. A typical compensation sum is EUR 70,000-80,000. The money is subject to income tax.
     
By Finnish standards the compensation is massive, as Finland lacks the kind of severance pay that exists in many other European countries.
      However, even by German standards the compensation to be paid out by Nokia is higher than normal.
      "It follows the lines of the best agreements ever made in Germany", says Gisela Achenbach, chair of the shop stewards, in a press release.
      The press release was issued jointly by the employers' and employees' side.
      Nokia director Veli Sundbäck says that the company "bore special concern from the very beginning to compensate the loss of jobs in a respectful and fair manner".
      However, the employees' side noted that Nokia's original offer was EUR 70 million, and not EUR 200 million.
      "That was the sum that was written into the original social package, but it was just the foundation for the negotiations", Nokia said on Tuesday.
      According to the company, the employees had also demanded significantly more than the EUR 200 million that was originally agreed on.
      Details of the deal have yet to be agreed upon. Nokia promised more information on the costs of the factory shutdown next week when it publishes its result.
     
It also appeared on Tuesday that agreement was near in another dispute over the closure of the factory.
      The State of North Rhein-Westphalia is still demanding that Nokia return EUR 60 million in industrial subsidies that it paid the company over the years.
      The deadline set for the payback ran out a week ago, and there were reports in the German media about tensions building.
      When Helsingin Sanomat asked about the matter from the state administration, a state official answered: "We are pleased at the agreement between Nokia and the employees' side. The state is also continuing negotiations with Nokia in a constructive spirit. Both sides are looking for a solution."
     
Nokia announced in mid-January that it would shut down its mobile telephone factory in Bochum, and move most of the production to a new factory in Romania.
      The announcement led to a storm of protests in the Ruhr region. Even Chancellor Angela Merkel questioned the reasons given by Nokia to close down a profitable factory.


Previously in HS International Edition:
  Frankfurt Book Fair President: Nokia closure not responsible for Finland rejection (10.3.2008)
  Merkel: Germany unlikely to demand that Nokia pay back R&D investment subsidies (19.2.2008)
  Nokia´s Kallasvuo apologises to Germans (25.1.2008)
  Anti-Nokia sentiment unites Ruhr region in massive protest (23.1.2008)
  Nokia shutting down plant in Germany, moving manufacture to Romania (16.1.2008)

Helsingin Sanomat