Nokia’s German subsidies investigated after factory closure announced

28 Jan 2008

Dow Jones Newswires reports that German officials are looking into whether Finnish vendor Nokia, which recently said it would close its factory in the western city of Bochum, had received more state subsidies than it was due. A spokesman for the economy ministry of North Rhine-Westphalia said the mobile phone manufacturer was given EUR40 million (USD59 million) in subsidies based on the number of staff it employed there, adding that the state’s preliminary investigations suggested the Finnish giant had hired ‘between 200 and 400’ less people than the 2,860 it promised to employ at Bochum between 2002 and 2005. ‘We are examining if this affair has consequences, and if so, what they are,’ he said. The weekly Focus magazine claimed prosecutors in Dusseldorf, the state capital, were considering an investigation into possible subsidy swindling. The federal government is also looking at reclaiming some of the EUR20 million in subsidies it gave to Nokia, according to the head of the NRW government Juergen Ruttgers.

Nokia announced on 15 January that it planned to close the factory in Bochum, which employs 2,300 people, by mid-2008 and shift production to Romania where labour costs are lower.

Germany, Nokia