Nokia - maybe not as much profit as they thought...
Working in Germany at the moment, I can obviously hear a lot of negative press in Germany about Nokia.
I personally try to stay open minded, but having spoken to some poeple involved, it seems, that Nokia really does have a case to answer.
It might only be a technicality, but at the moment it seems, that it would make Germans feel really good, that one of the subsidy Locusts wouln't get away with it.
I am generally against subsidies, since they are in essence nothing than a bride (I will give you money if you stay and this government looks good, because "we are doing something against unemployment")
That Nokia pretends to be surprised (or possibly is surprised) doesn't surprise me, because they didn't expect that much resistance.
Due to the Siemens / BenQ disaster, Germans are very sensitive to issues like this.
What makes matters even worse, is the fact, that Nokia was making huge profits with this factory in Bochum and Nokia is now working on profit maximisation ("profit at all cost" so to speak) rather than profit optimisation.
So just to squeeze out a few million more (which is not necessarily a lot in terms of profit per share) and some more subsidies, they just close down a plant, which is still very profitable, and holds highly skilled personal.
At them moment there is even research into a German law, which prohibits certain actions, if it is in "bad taste".
This law states that something is not permissible when it appears to go too much against public opinion. For example:
when the borders between east and west Germany opened obviously a lot of people came over. things like bananas where very rare and expesnive in east Germany. Some grocery stores decided to bring the prices for bananas to something like 10-15DM/kg from around .99DM/kg.
Police closed down these shops and most of them were prosecuted for acting in "bad taste" and were fined.
But also the issue with not having employed as many people as they initially promised it's not just ten or twenty, but around 10% less than contractually agreed.
So lets wait and see,
Best regards from Germany