January 17, 2008 / 2:20 PM / in 11 years

German unions urge Nokia boycott over plant closure

BERLIN (Reuters) - German unions on Thursday called for a consumer boycott of Nokia NOK1V.HE products to protest against the cellphone maker’s plans to close a German plant.

A padlock is pictured in front of the factory of Nokia in Bochum January 16, 2008.. German unions on Thursday called for a consumer boycott of Nokia <NOK1V.HE> products to protest against the cellphone maker's plans to close a German plant. REUTERS/Ina Fassbender

Nokia, the world’s top cellphone maker, said on Tuesday it wanted to move production to lower-cost regions and said the plant, in the western city of Bochum, is not competitive enough. The company has said it may cut up to 2,300 staff.

“Boycott Nokia!” Dietmar Muscheid, regional head of the Confederation of German Unions (DGB), said in a statement.

“Whoever buys a cellphone today should think about the choice they are making and what catastrophic consequences the company’s actions in Bochum will have for thousands of workers,” said Muscheid, who heads the DGB in the southwest state of Rhineland-Palatinate.

The German government has urged Nokia to reconsider the plant closure and has threatened to block any European Union aid for the relocation. The European Commission, however, has said the cellphone maker will not receive any.

Pictures of sobbing plant employees, some holding up Nokia phones in protest, featured across the front pages of German newspapers on Thursday.

The premier of North-Rhine Westphalia, the western state where the factory is based, has attacked the plan and said Nokia risked appearing a “subsidy locust”. Some politicians have said all subsidies received by the company should be repaid.

Voices from across the political spectrum were quick to join the criticism. “The closure of the Nokia plant in Bochum after having received EU financial aid is scandalous,” said Left party leader and former German finance minister Oskar Lafontaine.

Herbert Reul, a conservative European Parliament member, said the EU should now think about cutting the amount of subsidies it can give to companies by more than half.

He told the Koelner Stadt-Anzeiger newspaper the bloc should give companies only up to 20 million euros ($29.32 million) per project as opposed to as much as 50 million at present.

Government officials will meet Nokia representatives this week to discuss the plant’s future, the Financial Times Deutschland reported on Thursday.

“I’m not convinced by the various reasons given by Nokia for closing the plant,” deputy economy minister Hartmut Schauerte, who will be taking part in the meeting, told the FTD.

The newspaper’s editorial praised the closure as a wise step. “The management are acting with foresight ... there is no real future for the mass production of everyday electronic goods in Germany.”

Nokia says labor costs in Germany are nearly 10 times those in EU newcomer Romania, where it plans to move most of the production.

A company official told best-selling Bild newspaper he saw “no scope” for going back on the decision to close the plant, which was made by the company before Christmas.

Reporting by Nikola Rotscheroth and Sylvia Westall, editing by Will Waterman

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