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| Nokia Redirects Business to Asia |
| (2011-09-30) |
| Last updated: 2011-10-03 10:25 EET |
Opened in February 2008 following an investment totaling 60 million euros, Nokia’s Jucu village factory, in central Romania, will be ending all activity by the end of this year. The decision is part of a Nokia campaign to optimize and reduce costs. At present, the Finnish mobile phone manufacturer considers its high-volume production units in Asia to be more efficient.
The withdrawal of Romania’s second largest exporter translates into a 0.25% reduction in the country’s GDP and a new wave of unemployment. Some 2000 employees have been laid off, to be added to another 120 that were made redundant earlier this year when Nokia also closed down the Center for Development and Research in Cluj. In their efforts to help the jobless, the Romanian authorities are thinking of accessing the European Globalization Adjustment Fund.
According to representatives of the Cluj County Employment Agency, the 10 million euros to be shelled out would be used to set up a programme for professional conversion and retraining, also aimed at encouraging employees and presenting them with new job opportunities. The head of the agency, Daniel Don, says that benefits will be offered from the accessed funds for everyone made redundant. For the time being, Nokia employees will have their salaries paid until the factory closes down and will be paid the equivalent of an additional three salaries in compensation.
The Finnish group has expressed its commitment to bear the costs of re-professionalization and training courses that are part of a so-called “bridge programme”. The shutdown of Nokia’s plant led the government to convene an emergency meeting. Following this, government officials said negotiations were already underway to attract big investors that would offset Nokia’s withdrawal. More precisely, they are eyeing 21 potential projects worth 1 billion euros, with the authorities arguing at least 8 thousands jobs would be made available.
Opposition members however say the government is responsible for Nokia’s relocation. Liberal Senator Marius Nicoara, the president of the Cluj County Council at the time the contract was signed with the Finnish group, said the Romanian authorities failed to fulfill their commitments, including the building of a cargo terminal at the Cluj airport, a runway for landing large freight planes and the completion of a highway linking Romania to Western Europe that would speed up mobile phone exports. Adding to all this, Nicoara argues, were other mistakes such as the VAT hike and the rise of salary taxes and income levies.
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