Nokia factory closure--the story continues

The Government of the German state of North-Rhine Westphalia is demanding US$92 million from Finnish phone maker Nokia. The money is repayment for the subsidies granted to Nokia when it opened a mobile phone plant in Bochum in 1998. Earlier this year Nokia announced its intention of closing the plant and moving production to Romania to take advantage of cheaper labour and operating costs. The decision sparked fury in Germany and the demand for repayment of the subsidies is the latest episode in a saga that seems likely to run on and on. Nokia's stance is that it has fulfilled all its obligations related to the subsidies so it is under no obligation to repay the money. Apparently the German Federal Government is not buying this position and is threatening to take legal action against Nokia.

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