Nokia to shut German factory

HELSINKI: Nokia plans to close its handset factory in Germany and cut about 2,300 jobs as the site ‘lacks competitiveness’. The factory in Bochum is scheduled to be closed in mid-2008, Nokia said on Tuesday in a statement.

Production will be moved to more competitive plants in Europe, the company said without elaborating. It didn’t disclose potential costs related to the shutdown.

Nokia has European plants in Finland, Hungary and the UK, and is building a new site in Romania. Last month, the company decided to move some production lines from Finland to South Korea because of labor shortages.

“The planned closure of the Bochum production site is necessary to secure Nokia’s long-term competitiveness,” Veli Sundbaeck, head of corporate relations and responsibility, said in the statement. “It cannot be operated in a way that meets the requirements for global cost efficiency and for flexible capacity growth.”

Nokia rose 2.4% to e24.24 as of 11:51 am in Helsinki trading.

The Finnish company employed about 113,000 people as of September 30. Nokia also has factories in Mexico, Brazil, China and India. It is currently spending $75 million in Chennai to boost capacity at the Indian plant.

Non-production related activities in Bochum will also be closed, the company said. Nokia said it plans to sell its line fit automotive business and is in talks to sell the adaptation software research unit to Sasken Technologies.