Nokia produced 1 million mobile phones in Romania

Nokia announced today that it had produced the 1 millionth mobile phone at its new factory from Cluj, Romania. This comes after only three months since the factory started the production, as the plant opened its doors at the beginning of the year, in February.

For the moment, the Cluj factory makes Nokia cell phones for the European market and it mainly roles-out entry-level devices. The plant has around 700 employees, but when it reaches the full production capacity (at the end of 2009), it is estimated that no less than 3,500 people will work there.

Talking about the 1 million mark announced today, John Guerry, Director of the Cluj Factory, said: "This number represents a great success for us and it should be a pride for all those who sustained us since the debut of our operations in Cluj. The beginning of production in Romania was a fruitful one, and Nokia's clients from all over Europe are satisfied. We've managed to recruit dedicated and dynamic employees and I'm sure that, thanks to this wonderful team, the Cluj factory will become a model of performance when it comes to product quality."

The Cluj factory is the 11th one from all the factories that Nokia has around the world and its construction was first announced back in March 2007. The decision to build a facility in Romania was taken by the Finnish company mainly due to the low production costs found here. This led to the closing of Nokia's plant from Bochum, Germany, which should be completed in June.

Nokia invested until now more than 60 million USD into the Cluj factory, but the giant mobile manufacturer will surely recover the investment in a short time, once the facility reaches full production capacity and starts making more handsets.

Source SoftPedia

Nokia Will Pay $314M to Close Bochum Plant

DUESSELDORF, Germany (AP) -- Nokia Corp. said Tuesday that it has agreed with worker representatives on a $314 million plan to soften the blow from its closure of a factory in Germany and the reopening at Jucu in Romania.

Nokia was heavily criticized by German unions and politicians when it announced in January that it planned to close the plant in Bochum in the industrial Ruhr region at a likely cost of 2,300 jobs.

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

Gisela Aschenbach, the head of the employee council in Bochum, said 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."

"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," executive vice president Veli Sundback said in a statement.

Nokia Chief Executive Olli-Pekka Kallasvuo has apologized for the decision to close the plant but has said it was necessary, given that the factory makes 6 percent of Nokia's handsets but accounts for 23 percent of its global labor costs.

The company has said labor costs in Bochum were nearly 10 times those at another plant in Romania -- a point that has particularly irked officials in the region, who argue that labor accounts for only a small proportion of overall costs.

The state government in North Rhine-Westphalia has demanded that Nokia return investment subsidies paid in the late 1990s, plus interest - a total of nearly $94 million.

It has claimed that Nokia has failed since 2002 to fulfill conditions under which the subsidies were granted, including creating a minimum number of permanent jobs.

Nokia has rejected the demand and the charge, saying it exceeded requirements.