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FT.com / Home UK / UK - Germany steps up Nokia protests

Germany steps up Nokia protests
By Hugh Williamson in Berlin

Published: January 19 2008 02:00 | Last updated: January 19 2008 02:00

German politicians yesterday declared that they were ditching their Nokia mobile phones as anger grew over the Finnish company's decision to move a factory from Germany to Romania at the cost of 2,000 jobs.

Peer Steinbrück, finance minister, accused Nokia, the world's largest mobile phone maker, of "caravan capitalism" while a spokesman for Angela Merkel, the chancellor, said that she was expecting "more information" on Nokia's motives.

Many Germans appeared shocked at Nokia's announcement earlier this week that it was moving its plant from the western city of Bochum. The company has often been praised for keeping Germany's last mobile phone plant long after others shifted production abroad.

The agriculture minister, Horst Seehofer, said he was switching to another brand of phone "because I don't like the way they are doing this".

Economists, meanwhile, shook their heads at the fuss.

"The decision is not really surprising. said Christoph Schmidt, head of the RWI economic think-tank in Essen.

"It was a matter of time before this shift occurred. It's a necessary - but painful - adaptation process for Germany."

Christian Dreger of Berlin's DIW economic institute added: "Most producers of textiles and consumer electronics moved out of Germany to eastern Europe and elsewhere in the 1990s or before. Nokia's decision is completely understandable".

Nokia said labour costs in Romania were only a tenth of those in Germany.

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Copyright The Financial Times Limited 2008