UPDATE 2-Nokia, unions agree on 200 mln euro Bochum deal

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By Tarmo Virki and Agnieszka Flak

HELSINKI, April 8 (Reuters) - Nokia (NOK1V.HE) and a German union agreed on Tuesday on a 200 million euro ($315.4 million) package for employees in Bochum, as the world's top cellphone maker goes ahead with the controversial plant closure in June.

Some 2,300 employees will lose their jobs in the economically depressed region, which has lost its former historic mining and steelmaking industries.The Finnish handset maker is moving production to Romania, were costs are cheaper.

Nokia's plans to shut Germany's last mobile telephone factory have created a storm of protests, with Germany's finance minister Peer Steinbrueck accusing Nokia of caravan capitalism.

Nokia said it would comment on the financial costs of the closure in its first-quarter report, due on April 17, but analysts said it should not increase much from the 200 million euros.

"The cost was pretty much as expected," said Hannu Rauhala, an analyst with Pohjola Bank.

Shares in Nokia were 1.8 percent lower at 21.42 euros at 1435 GMT, in line with a fall in the DJ Stoxx European technology shares index .SX8P.

Germany, the world's biggest goods exporter since 2003, has seen its technology sector hit hard in recent years. In 2006, 3,000 workers lost their jobs when BenQ Mobile declared bankruptcy, a year after it bought off Siemens' cellphone unit.

Some union leaders in Germany have called for a boycott of Nokia goods, and senior politicians have joined in the attack.

Nokia board member Veli Sundback said on Tuesday he hoped the 200 million euro package would settle the disagreement between the mobile phone maker and the North-Rhine Westphalia state (NRW), where Bochum is located.

"We hope that an agreement can be reached in the next few days," he said in Duesseldorf.

NRW is asking Nokia to pay back subsidies of around 60 million euros used to revamp the plant.

Nokia has said labour costs in Germany are nearly 10 times higher than in EU-newcomer Romania and has refused to back down.

Germany, Europe's largest economy, is Nokia's third-largest market, with annual sales of 2.64 billion euros. Nokia employed 14,000 people in Germany at the end of 2007.

"The closure of the plant does not mean that Nokia is leaving Germany or that Germany is not an important market," said Nokia's Sundback.

Carmakers have also cut thousands of jobs in Germany to reduce labour costs, while appliance maker Electrolux closed a German plant in 2006 and cut around 1,750 staff.

Nokia said on Tuesday it had also reached an agreement with unions on planned divestments of two small parts of the Bochum business, which employ 300 staff in total. (Additional reporting by Tom Kaeckenhoff in Duesseldorf, editing by Will Waterman)