BERLIN (AP) — A German state government said Wednesday it is demanding that Nokia Corp. repay euro41 million (US$60 million) in public subsidies it received to finance a plant the cell phone maker now plans to close.
Nokia last month announced that it would close its manufacturing plant in Bochum, in the industrial Ruhr region — a move that likely will result in the loss of 2,300 jobs and has infuriated German unions and politicians.
The North Rhine-Westphalia state government said its state-owned NRW.Bank had sent Nokia a demand for the return of some euro41 million (US$60 million) in investment subsidies paid in 1998 and 1999.
The state economy ministry maintained that Nokia had failed to fulfill conditions under which it had to create a minimum number of permanent jobs. In a statement, the ministry said that the number had been below requirements since 2002.
Nokia was given a week to respond, it added.
The Espoo, Finland-based company said it was ''astonished'' by North Rhine-Westphalia's effort to recall the subsidies, and said it strongly believes that ''such an attempt is without merit.''
''Nokia not only fulfilled the conditions of the agreement, it exceeded them,'' it said.
CEO Olli-Pekka Kallasvuo has apologized for the decision to close the Bochum plant, but has said the plan was necessary.
He has said the factory makes 6 percent of Nokia's handsets, but accounts for 23 percent of its global labor costs.
