Nokia pays big to close German plant: Please stop the noise! Oh, and here’s $316 million

Nokia Corp. said this week it would finance a $316 million plan to assist German workers displaced by the handset vendor’s decision to close a major plant in Bochum, Germany, and move the operation to Romania, where labor costs are lower.
Plant closings in Germany – see the BenQ-Siemens brouhaha of 2006-07 – typically raise storms of protest from unions, politicians and media.
The local government in North Rhine-Westphalia, where Bochum is situated, had claimed that by closing the Bochum site, Nokia violated its agreement to create a minimum level of permanent jobs, for which the company gained tax subsidies valued at more than $90 million – and demanded repayment.
Nokia began the process of shutting down its Bochum site by saying that it wasn’t leaving any unresolved commitments and therefore wouldn’t make any related payments.
Nokia CEO Olli-Pekka Kallasvuo has since made the seemingly obligatory corporate apology and Monday the company announced that it had reached an agreement on “key elements of a reconciliation of interests and social plan for (affected) employees.”
Nokia thus will pay about $316 million, on a one-year effort to assist displaced workers.
According to Nokia, the Bochum operation made 6% of the company’s handsets, while costing 23% of its worldwide labor spend. Romania labor costs are almost one-tenth the cost of German labor, according to Nokia.