Nokia to pay €200m to close German factory

Nokia has agreed a €200 million (US$314 million) plan with workers' representatives to soften the blow of its closing a factory in Germany, an Associated Press report said.

Nokia has been heavily criticised by German unions and politicians since in January when it announced it would close the plant in Bochum, in the industrial Ruhr region, making some 2,300 unemployed.

The company said the agreement means the plant will close on 30 June as planned.

Nokia will set up a 'transfer company' to help affected staff for one year.

The Associated Press report quoted Gisela Aschenbach, the head of the employee council in Bochum, as saying that 'additional payments will take into account the specific situation of families and severely disabled persons.'

Nokia said the outcome was a 'fair and responsible social plan,' the report said.

Nokia's CEO, Olli-Pekka Kallasvuo, has apologised for the decision to close the plant but has said it was necessary, given that the factory makes only 6% of Nokia's handsets, but accounts for 23% of its global labour costs.

The company has said labour costs in Bochum were nearly ten times those at another plant in Romania, a point that has particularly irked officials in the region, who argue that labour accounts for only a small proportion of overall costs.

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