MUNICH, Germany Against the background of ongoing arguments over Nokia's plans to close down its Bochum plant, profitability figures have surfaced that make the handset giant appear in a bad light. Nokia claims the figures are "fictive".
German magazine Capital, not exactly a publication that divulges worker's unions ideas, said the plant which Nokia intends to close achieved an operating profit of 134 million (about $198 million) in 2007 certainly not bad for a doomed plant. According to Capital, this equals a profit (not revenue) of 90.000 per worker, significantly higher than the average salary paid in that region.
The Bochum operation also made an additional capital profit of 70 million, the magazine wrote with reference to internal confidential Nokia material. The local management also had plans underway to lift the Nokia plant to a profitability comparable to the company's plants in Eastern Europe. Another detail on the Bochum plant productivity: During the period between July and December the plant surpassed its targets, producing 18.7 million handsets instead of only 16.7 million units as planned initially. The magazine added that over the years, Nokia had received 88 millions in state subsidies for the Bochum plant.
Nokia called the figures incorrect and misleading. "The Bochum plant does not achieve any profit since it does not sell anything", a Nokia spokesperson said to EE Times Europe. "The production is organized in a network, and within this network, the Bochum plant is one with the worst productivity", she explained. "The figures published in the media are fictive and serve only for tax purposes. This is a method set by the OECD".
In addition, a Reuters report quoted a company spokesperson saying that while 23 percent of Nokia's total labor costs are allotted to the company's German activities, the plant produces only 6 percent of the group's total output.
In the meantime, a pan-European workers unions meeting on the Bochum plant case ended with an éclat: Representatives of the Bochum workers' council dropped out of the meeting in Brussels after their Finnish colleagues had defended the decision to transfer the Bochum manufacturing activities to Romania.