Nokia and the "big secret"
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By Antti Blåfield
The most electrifying moment at the Wage-Earners' Election Panel organised by Finland's labour union confederations came when Pentti Hartikainen, head shop steward at Perlos, asked party leaders to take a stand on "great silenced secret" by commenting on what really is happening in Nokia.
Hartikainen had some good reasons for his demand. He has been involved in a series of co-determination talks on the elimination of a total of 2,400 jobs. The only party leader to make any reference at all at the debate was Prime Minister Matti Vanhanen (Centre), who said that he would not take part "in speculation concerning a brand". Eero Heinäluoma (SDP), Jyrki Katainen (Nat. Coalition) Matti Korhonen (Left Alliance), Anni Sinnemäki (Green), and Jan Oker-Blom (Swedish People's Party) did not dignify the question with an answer.
Nokia is an issue that is difficult for Finns to comprehend. No greater economic success has been experienced in this country: in a period of 15 years, a company known by consumers mainly for toilet paper and rubber boots has grown to be the world's leading electronics company, when measured in terms of customers.
Year after year it has been said that such success cannot continue, and whenever Nokia's result has taken a dip, the scare has been accompanied by something resembling triumph: "so now it starts going downhill". And yet, in January Nokia showed that it is able to turn the impossible into the possible. Although the average price of its products declined, and although pressure on the margins grew, the company's gross margin also grew. This means that after manufacturing costs, the company was again left with more money for product development, marketing, and distribution of profits.
However, at the same time, the head shop steward of the Nokia subcontractor Perlos is forced to hold talks on behalf of his fellow employees, which is to result in the closing of Perlos factories in Finland. Hartikainen and 1,200 Perlos employees wear lapel badges reading "come and be our employer".
Nokia's success and the anguish of its subcontractors raises unpleasant questions. How is it possible to be the most successful in the world, and at the same time to leave thousands of fellow workers to fend for themselves? What is Nokia's responsibility for its subcontractors?
From its early beginnings, Nokia has been a special company in Finland.
The founder of Nokia brought the technology of modern paper manufacture to Finland, and after that, the company has been seeking something new: from rubber products to cable, from there to telephone exchanges, radio telephones, computers, and televisions. The company's directors have been charismatic figures who have been listened to, and who have known how to use power.
The 1980s were a time of frenzy and decline for the company. At the beginning of the decade the conquest of Europe was set as Nokia's goal, and the decade ended with the suicide of the CEO and the destruction of all of the dreams.
It is hard to imagine a company more adrift than Nokia was at the time. The business goals had proven to be unrealistic, a power struggle was raging at the executive level, and one of the main owners was offering to sell the company to its rivals. The company had become an outcast when a new administration took control in 1992.
These two things need to be kept in mind, when thinking about today's Nokia: the company's innovative tradition and its collapse and desecration. There had always been encouragement in the company for risk-taking and seeking out something new, and such encouragement continued. However, there was also some introspection. Internal power was strengthened through the company's own methodical value programmes, while at the same time setting up a psychological wall against what was perceived to be a hostile outside world.
Finns have watched with amazement how a giant has grown here, whose internal life is virtually unknown. Ignorance and exclusion - as well as sheer jealousy of its success - have cultivated a suspicion that breaks out when the company operates according to trans-national logic.
Two far-reaching decisions were made in Nokia in the 1990s. The company foresaw that mobile telephones would become a device used by ordinary people, and that it would therefore be necessary to build up a global brand, and to create a system of planning and production to allow the manufacture of the telephones on a completely different scale than had ever been dreamed of in Finnish industry. Already 13 years ago the company had decided to go to China with the goal of achieving a leading position on that market.
An overwhelming planning and production machinery and a knowledge of developing markets have given Nokia the edge over all competitors. Nokia is more cost-effective than its competitors, but this has come at a price, which is being paid now by the workers of Nokia's Finnish subcontractors.
In the name of cost-effectiveness, Nokia has gone into closer cooperation with Asian subcontractors, who are able to design and build a larger proportion of the telephones. It is chillingly cold business, where the resources of Finnish subcontractors are not sufficient, and the costs too high. Time will tell to what kind of a devil Nokia has given its finger.
Workers employed by Nokia subcontractors say that Nokia is indifferent toward its roots. Their experience is that the generation that has taken on responsible jobs of planning and management have no country, and that they only serve a multinational money machine. It is the bitter experience of those working in subcontracting that the most important of Finnish values - never to leave one's buddy behind - is no longer a Nokia value.
From inside Nokia it can be said that the company continues to directly employ 24,000 Finns, and that it paid EUR 1.3 billion in taxes last year. The corporate management answers primarily to its owners, and Finns have sold their shares to foreign investors at a good profit. The management of the company is as patriotic as possible.
Thousands of people who were first enticed into the sector and then let go have the right to hear Nokia's view of their fate. The company's managers should find a way to tell about their relationship with Finland and with Finnish subcontractors.
Political leaders would also do well to analyse, when asked, the relation between public power and Nokia. Nokia's turnover last year was greater than Finland's state budget this year. It is not possible for there to be such a great silenced secret. If such a secret exists, it will give birth to a new national trauma.
Helsingin Sanomat / First published in print 4.5.2006
The most electrifying moment at the Wage-Earners' Election Panel organised by Finland's labour union confederations came when Pentti Hartikainen, head shop steward at Perlos, asked party leaders to take a stand on "great silenced secret" by commenting on what really is happening in Nokia.
Hartikainen had some good reasons for his demand. He has been involved in a series of co-determination talks on the elimination of a total of 2,400 jobs. The only party leader to make any reference at all at the debate was Prime Minister Matti Vanhanen (Centre), who said that he would not take part "in speculation concerning a brand". Eero Heinäluoma (SDP), Jyrki Katainen (Nat. Coalition) Matti Korhonen (Left Alliance), Anni Sinnemäki (Green), and Jan Oker-Blom (Swedish People's Party) did not dignify the question with an answer.
Nokia is an issue that is difficult for Finns to comprehend. No greater economic success has been experienced in this country: in a period of 15 years, a company known by consumers mainly for toilet paper and rubber boots has grown to be the world's leading electronics company, when measured in terms of customers.
Year after year it has been said that such success cannot continue, and whenever Nokia's result has taken a dip, the scare has been accompanied by something resembling triumph: "so now it starts going downhill". And yet, in January Nokia showed that it is able to turn the impossible into the possible. Although the average price of its products declined, and although pressure on the margins grew, the company's gross margin also grew. This means that after manufacturing costs, the company was again left with more money for product development, marketing, and distribution of profits.
However, at the same time, the head shop steward of the Nokia subcontractor Perlos is forced to hold talks on behalf of his fellow employees, which is to result in the closing of Perlos factories in Finland. Hartikainen and 1,200 Perlos employees wear lapel badges reading "come and be our employer".
Nokia's success and the anguish of its subcontractors raises unpleasant questions. How is it possible to be the most successful in the world, and at the same time to leave thousands of fellow workers to fend for themselves? What is Nokia's responsibility for its subcontractors?
From its early beginnings, Nokia has been a special company in Finland.
The founder of Nokia brought the technology of modern paper manufacture to Finland, and after that, the company has been seeking something new: from rubber products to cable, from there to telephone exchanges, radio telephones, computers, and televisions. The company's directors have been charismatic figures who have been listened to, and who have known how to use power.
The 1980s were a time of frenzy and decline for the company. At the beginning of the decade the conquest of Europe was set as Nokia's goal, and the decade ended with the suicide of the CEO and the destruction of all of the dreams.
It is hard to imagine a company more adrift than Nokia was at the time. The business goals had proven to be unrealistic, a power struggle was raging at the executive level, and one of the main owners was offering to sell the company to its rivals. The company had become an outcast when a new administration took control in 1992.
These two things need to be kept in mind, when thinking about today's Nokia: the company's innovative tradition and its collapse and desecration. There had always been encouragement in the company for risk-taking and seeking out something new, and such encouragement continued. However, there was also some introspection. Internal power was strengthened through the company's own methodical value programmes, while at the same time setting up a psychological wall against what was perceived to be a hostile outside world.
Finns have watched with amazement how a giant has grown here, whose internal life is virtually unknown. Ignorance and exclusion - as well as sheer jealousy of its success - have cultivated a suspicion that breaks out when the company operates according to trans-national logic.
Two far-reaching decisions were made in Nokia in the 1990s. The company foresaw that mobile telephones would become a device used by ordinary people, and that it would therefore be necessary to build up a global brand, and to create a system of planning and production to allow the manufacture of the telephones on a completely different scale than had ever been dreamed of in Finnish industry. Already 13 years ago the company had decided to go to China with the goal of achieving a leading position on that market.
An overwhelming planning and production machinery and a knowledge of developing markets have given Nokia the edge over all competitors. Nokia is more cost-effective than its competitors, but this has come at a price, which is being paid now by the workers of Nokia's Finnish subcontractors.
In the name of cost-effectiveness, Nokia has gone into closer cooperation with Asian subcontractors, who are able to design and build a larger proportion of the telephones. It is chillingly cold business, where the resources of Finnish subcontractors are not sufficient, and the costs too high. Time will tell to what kind of a devil Nokia has given its finger.
Workers employed by Nokia subcontractors say that Nokia is indifferent toward its roots. Their experience is that the generation that has taken on responsible jobs of planning and management have no country, and that they only serve a multinational money machine. It is the bitter experience of those working in subcontracting that the most important of Finnish values - never to leave one's buddy behind - is no longer a Nokia value.
From inside Nokia it can be said that the company continues to directly employ 24,000 Finns, and that it paid EUR 1.3 billion in taxes last year. The corporate management answers primarily to its owners, and Finns have sold their shares to foreign investors at a good profit. The management of the company is as patriotic as possible.
Thousands of people who were first enticed into the sector and then let go have the right to hear Nokia's view of their fate. The company's managers should find a way to tell about their relationship with Finland and with Finnish subcontractors.
Political leaders would also do well to analyse, when asked, the relation between public power and Nokia. Nokia's turnover last year was greater than Finland's state budget this year. It is not possible for there to be such a great silenced secret. If such a secret exists, it will give birth to a new national trauma.
Helsingin Sanomat / First published in print 4.5.2006
ANTTI BLÅFIELD / Helsingin Sanomat
antti.blafield@hs.fi