Nokia to Close Plant in Romania Early

A fall-off in orders has forced Finnish mobile phone company Nokia to close its plant in Jucu, central Transylvania, a month earlier than was planned, according to media reports.

“The first 500 workers have already been sent home, while the other 1,330 will be laid off by December 1,” a local union leader, Valentin Ilcas, said. "Activity has stopped at Nokia due to the lack of orders," he added.

Every dismissed worker will receive a Nokia Smartphone, 500 euro money towards re-training courses and a 50 euro Christmas bonus.

On 30 September, Nokia’s decision to close its unit in Jucu took Romania by surprise. The centre-right government of Emil Boc tried to calm nerves following the announcement, saying it was based on strictly economic criteria.

In the last two years, the Nokia subsidiary in Romania was the country's second largest exporter. But now the company has decided to move its operations to cheaper countries.

Ironically, Romania benefited from the same remorseless economic logic in January 2008, when Nokia announced it was closing its plant at Bochum, Germany, with 2,300 employees, and moving production to Romania, where costs were lower.

The plant in Jucu, where the 1200 series of mobile phone was produced, opened in September that year.

The move created anger in Germany, while the European Union asked Romania to provide details of any subsidies it had granted to Nokia as part of the deal to open a plant in the country.

Now Romania faces the same risk of multinational companies withdrawing their investments as the crisis increases global competition.