Nokia to pay off staff in axed German factory

Mobile phone giant Nokia has reached agreement on key elements of a reconciliation of interests and social plan for employees affected by the company's closure of its Bochum site in Germany.

Nokia announced its intention to shut down the site in January.

The €200m package will see the Bochum factory shut down by 30 June, after which Nokia will establish a transfer company for affected staff for one year.

"As we said in January when we started the discussions about closing Bochum, Nokia has agreed on a fair and responsible social plan," said Veli Sundbäck, executive vice president of Nokia and chairman of the Supervisory Board of Nokia in Germany.

"We are well aware that closing the site is painful for all affected employees and their families. As we have clear responsibilities to our employees in this kind of difficult situation, it was our special concern from the start to compensate the loss of the jobs in a respectful and fair manner."

Both parties have also reached agreement on terms related to employee issues in the cases of the planned divestment of the Line Fit Automotive Business to the former business unit head, Razvan Olosu, and Equity Partners GmbH, as well as the Bochum-based core software R&D entity to Sasken Communication Technologies.

These divestments should help with the task of finding alternative employment for Bochum workers by enabling employment for approximately 300 staff in total.

"We achieved our goal, which was to reach a satisfactory agreement for our members that is in line with the best German agreements," said Gisela Achenbach, head of the Bochum works council.

"Furthermore, additional payments will take into account the specific situation of families and severely disabled persons."

Nokia has promised that although production at the Bochum plant will cease by the of June, the company will continue to have a strong presence in North Rhine-Westphalia and Germany through it sales and marketing unit in Düsseldorf and a devices research and development team in Ulm.

The final reconciliation of interests and social plan are expected to be signed in the next few weeks and further details on the financial costs will be revealed when it publishes its first quarter results on 17 April.