Veli Sundbäck, Executive Vice President of Nokia and Chairman of the Supervisory Board of Nokia GmbH. Photo: Courtesy of Nokia.

Mobile phone manufacturer Nokia is to close its Bochum plant in North Rhine-Westphalia, Germany – with the loss of 2,300 jobs – and move production to Eastern Europe, mainly Romania.

“The planned closure of the Bochum production site is necessary to secure Nokia’s long-term competitiveness,” said Veli Sundbäck, Executive Vice President of Nokia and Chairman of the Supervisory Board of Nokia GmbH.

“Due to market changes and increasing requirements for cost-effectiveness, production of mobile devices in Germany is no longer feasible for Nokia. It cannot be operated in a way that meets the requirements for global cost efficiency and for flexible capacity growth. Therefore we have to make this tough decision.”

The Financial Times reported that Nokia spokeswoman Arja Suominen said: “We are moving production to existing plants, mainly in Romania, which will start during the first quarter.” Nokia announced its plan to set up a mobile phone plant in Romania in March last year, investing €60 million.

As a consequence of the planned shift of production from Bochum to other European sites, Nokia also intends to discontinue other non-production activities at the Bochum site. It plans to sell its line fit automotive business and is in negotiations with Sasken Technologies to sell the Bochum-based adaptation software R&D-entity.

According to the company, its decision to discontinue manufacturing in Bochum is based on the lack of competitiveness of the location. They claim that renewing the site would require additional investments but this would not result in manufacturing in Bochum being globally competitive.

Nokia will start the consultations with the employee representatives as soon as possible in order to reach a satisfactory solution for all parties concerned. The financial costs associated with this restructuring will be determined along with the consultation process and reported in Nokia’s quarterly reporting for 2008.

For more information, visit: www.nokia.com.