German rage over Nokia plant closure grows

By Sylvia Westall

BERLIN (Reuters) - German anger over plans by Nokia (NOK1V.HE) to close a plant escalated on Friday, with the finance minister accusing the cellphone maker of "caravan capitalism" and others vowing to replace their Nokia phones.

Nokia, the world's top cellphone maker, said earlier this week it would close the plant in the western city of Bochum because it was not competitive and move production to Romania.

The Finnish firm's plans to cut up to 2,300 jobs have drawn political criticism ahead of state elections.

"This is the expression of a caravan capitalism which systematically undermines support for this economic and social system," Finance Minister Peer Steinbrueck a Social Democrat, told German radio.

"People are losing confidence and that is extremely dangerous and of political importance," he said.

The Economy Ministry later said it had hosted talks in Berlin between Nokia officials and the economy minister of North Rhine-Westphalia, the state where the plant is based. A ministry spokesman declined to give details on the outcome of the talks.

A Nokia spokeswoman in Helsinki declined to comment and referred questions to Nokia representatives in Germany, none of whom were available throughout Friday.

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

ANOTHER HIT

Germany, the world's biggest goods exporter since 2003, has seen its telecommunications sector hit hard in recent years.

In 2006, 3,000 workers lost their jobs when BenQ Mobile (2352.TW) declared bankruptcy, a year after it bought off Siemens' cellphone unit.

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

In Bochum, workers said they had finally given up believing the plant might be saved. "All our hope has died," worker Patsiou Dimitva said, crying outside the plant. "Only a miracle can help us now but I don't think there will be any."

Germany, Europe's largest economy, is Nokia's fifth-largest market, with net sales of 2.06 billion euros.

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