Salo residents try to adapt to post-Nokia future
Loss of tax revenue could force city to cut back on services
By Juhani Saarinen
Aila Jokinen is showing the house that she is selling in the Pertteli area of Salo. It has 224 square metres of living space, a swimming pool, and is located less than a 14-minute drive from the centre of Salo. The asking price is EUR 265,000.
In two weeks on the market, there have been no calls, “except from real estate agents”, she adds.
Jokinen, who lives in Salo on her own, is selling her house at a difficult time. The city, which had been referred to as the Silicon Valley of Finland, is suffering badly from Nokia's economic troubles.
“It doesn’t look very good after the most recent news”, Jokinen says.
Last Thursday’s announcement that Nokia’s mobile telephone factory in Salo would be closed down means that a total of 2,500 jobs will have been eliminated in the city in a single year. About 1,800 Nokia jobs will be left in Salo.
The unemployment rate is expected to rise from 11 per cent to as high as 20 per cent – to levels similar to those in small municipalities in the east of Finnish Lapland. Entrepreneurs in the city fear that commerce will ebb as buying power wanes.
Seppo Alanko, who runs a car dealership next to the factory that is being closed down, says that customers have become more cautious. Nevertheless, Audis and Volkswagens have been selling reasonably well this year.
Alanko believes that Salo will adapt to the closure of the factory as it did when the TV and radio manufacturer Salora and the city’s textile mills faded away.
Alanko does not feel that Salo is as dependent on a single factory as some Finnish communities have been on their paper mills.
“Salo has not been built around Nokia. Nokia came to Salo”, Alanko says. “The Nokia brand was just so powerful that it took a small community like that with it.”
Closing the factory is forcing the city to consider ways of saving money.
Salo’s financial manager Seppo Juntti calculates that the loss of tax revenues will be in the neighbourhood of EUR three million a year. The tax rate has been raised twice and now stands at 19.5 per cent, and nobody wants to raise it.
After a municipal merger in 2009, the city has cut back on public services. Service points and schools have been shut down, opening hours of libraries and youth facilities have been reduced, and so on, but even that is not enough.
“We need to open the package again”, Juntti says.
He does not want Salo to turn into a “Greece of Finland”. The city’s debt level remains moderate – about EUR 1,400 per resident.
One of the companies affected by the Nokia crisis is the Hotel Fjalar, which is located near the factory. Owner Tiina Kesälä set up the hotel in the former home of former Salora CEO Fjalar Nordell in 1997. In the best years four out of five hotel guests came to Salo because of Nokia.
“The decline in travel has been tough”, Kesälä says.
She wonders if the city might find some other travel-related attraction to bring in guests. Perhaps Rovio, which has been growing tremendously, might set up an Angry Birds theme park inside the empty factory – after all, the Angry Birds Park that was opened in Särkänniemi amusement park in Tampere is open only in the summer.
“People would be welcome here year-round”, Kesälä says.
Helsingin Sanomat / First published in print 16.6.2012
Previously in HS International Edition:
Up to 1,000 jobs to go from Nokia factory in Salo (8.2.2012)
Impending shutdown has severe impact on Salo (15.6.2012)
Elimination of 60% of jobs at Nokia factory has severe implications for Salo economy (9.2.2012)
Many former Nokia employees start businesses of their own (18.6.2012)
JUHANI SAARINEN / Helsingin Sanomat