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Nokia to Close Down Factory in Germany

Even one of the biggest cell phone makers in the world experiences down time. Nokia, the mobile giant in the mobile phone industry, would be closing one of its factories in Germany by the middle of this year. This move would relatively cut down the cost of the company. The sad thing would be, with such a drastic move, the company would be laying off more than 2,000 workers.

The Germany factory in Bochum would be closed down and cell phone production would be transferred to factories located in Europe. The company stated that European factories are more capable of volume production and are more competitive compared to the single factory in Bochum, Germany.
Veli Sundback, Nokia executive vice president, stated that the continued production of cell phones in Germany is no longer cost-effective because of the current market trend and the changes in consumer behavior over the years. It was a tough decision for the company, but Sundback said that the factory no longer add up to the requirements of Nokia for cost efficiency and hinders the company's capacity for growth. Ultimately, the Bochum factory proved to be costly in terms of labor and production. With the current situation, the company is already making arrangements with the union labor to settle on a deal.
In addition, the Germany site would no longer handle research and development. There are rumors that this department would be transferred to Sasken Technologies in India. At present, Nokia is looking at moving their production to Asia and South America where they can see promising potential growth for the company.
At present, Nokia has sites in China, India, United States, Mexico, South Korea and Brazil. The company would now be focusing on its cell phone production in its European factories in Hungary, Britain and Finland.