As part of Nokia CEO Stephen Elop’s plan to cut costs and curb losses, Nokia will shut down its manufacturing plant in Salo, Finland, in September. The move will see the factory’s 850 remaining workers lose their jobs
Experts say Nokia will be looking to have its products manufactured in lower cost countries such as Brazil and China.
Nokia’s has been suffering financially since Elop took over and the decision to close the factory in Salo is crucial as it sees the Finnish company going back on its commitment to manufacture its flagship products in its home country.
Also, when Elop visited the factory in February, it was seen as a move set to emphasise that the plant would not be shut down — but this wasn’t to be as he announced its imminent closure last week.
The closure will rob the town of Salo of about 90 percent of its tax revenue hence increasing the unemployment rate, which is hovering at around 11 percent.
Nokia however still builds products in Oulu, Finland, for the Nokia Siemens Networks business.
Salo is where it all began for the troubled mobile phone company. Thus its shutdown is seen as symbolic of what is happening at Nokia.
At its best times, Nokia contributed approximately 4 percent to the Finnish GDP. It also created and supported an ecosystem of technology startups and suppliers. According to analysts, it now accounts for less than 1 percent of Finland’s GDP.
What is also interesting and rather odd is that before his current position at Nokia, Elop worked for Microsoft as its head of business division for the Microsoft Office range of products. This could be of no consequence but one is left to wonder given the sudden partnership between Microsoft and Nokia as soon as he was appointed CEO.
The question is, will Microsoft buy Nokia Corporation?
The other question is, what do Nokia’s troubles mean to its African customers with Symbian based Nokia phones? (Symbian was discontinued by Nokia).
