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Nokia faces action over factory closure

Nokia, the world’s largest mobile phone maker, faces legal action in Germany next month in a battle over €60m ($93m) in investment subsidies it received for a factory it now plans to close.

Nokia’s decision in January to cut more than 2,000 jobs by closing its factory in Bochum, western Germany, and move it to Romania caused a political outcry.

North Rhine-Westphalia, the regional state that includes Bochum, this week set Nokia a deadline of March 31 to return “almost €60m”, the economics ministry said.

The claim, including €41m in subsidies and more than €18m in interest payments, is the largest ever claimed from a company by NRW, and one of the largest such claims in German history.

The case is being watched closely in Germany and elsewhere for signs that public authorities may in future be more careful in granting subsidies to large inward investors. Nokia rejected NRW’s demand and said that the company had “fulfilled all the relevant conditions associated with the subsidies”.

Nokia owed the money because the company had not fulfilled commitments under the subsidies contract, signed in 1999, to create about 2,900 “permanent jobs” at the Bochum plant, the economics ministry said.

The case may hinge on what “permanent jobs” means. NRW argues this did not include jobs that were temporary or outsourced, while Nokia argues that these can be counted. Nokia said it had created 3,200 jobs of various sorts and thereby fulfilled its commitments.

The economics ministry said the NRW Bank, the state-owned investment bank that is reclaiming the money, had a “legally water-tight case” to demand the repayment, although independent lawyers said NRW’s right to claim the money back may have expired several years ago.

Источник: Financial Times

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