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German State Demanding Payment for Plant Closure

By Staff Author | March 12, 2008

Nokia is still facing pressure from the German state of North Rhine-Westphalia for plans to close its manufacturing plant in Bochum. The state has asked the handset maker to return subsidies it received from the government for opening the plant in the area, with interest, for a total nearing $92 million.

Nokia previously rejected the idea of returning the subsidies, saying in early February that it was “astonished” by the state’s request. Nokia issued a statement then saying that over the last nine years the company has “invested more than $542 million in the Bochum site, well above the amount stipulated in the agreement.”

But yesterday, the state-owned NRW Bank demanded Nokia return nearly $92 million by the end of the month, threatening to take legal action if the handset maker refuses to pay.

The state claims that since 2002, Nokia failed to fulfill the subsidies condition of creating a minimum number of permanent jobs. Nokia has reportedly called for discussions of the state’s demands.

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