Nokia departure "economic crisis effect"

The closing of the Nokia plant has come as no surprise to the authorities in Bucharest, considering that on Wednesday the Prime Minister told them that there would be a major relocation of multinational investment in Romania.

The motivation provided by Emil Boc is the increase of the global competition following the economic crisis. During the government meeting held on Wednesday the Prime Minister also said that the executive must be prepared to attract more foreign investment in Romania.

But foreign investors are drowning in piles of documents and approvals necessary to start a business and that usually puts them on the run, as President Traian Băsescu pointed out on Thursday.

"We did issue a warning about this risk, about the fact that multinational companies will begin to reduce their activity in Romania and look, it is already happening. As for the potential investors that we have, who currently seem to be real, whether we refer to those who want to prospect in the Black Sea or in Romania for gas, oil, those who want to exploit gold, silver or copper, we might lose them too given our bureaucracy and lack of courage in taking on important decisions", the president said.

The closing of the Nokia plant in Jucu might lead to an increase in the unemployment rate

The announcement about the closing of the Nokia plant in Romania made the Prime Minister Emil Boc ​​ call the government members in a meeting.

According to the website of the executive, the National Administration of Land Improvements situation is going to be discussed, but it is hard to believe that the Nokia topic will not be covered.

Especially since on Thursday the general manager of Nokia Romania came to the government headquarters to talk with the Prime Minister.

Regardless of any comment, Nokia has announced that is moving its plant from Cluj, arguing the need to move their production facilities closer to suppliers and to the most important markets. So people in Cluj are left only with the joy of 2007, when the mobile plant moved from Germany to Romania.

Nearly 2 000 employees of the Nokia plant in Jucu will be left without their jobs, according to Radio Romania Actualităţi correspondent Claudiu Pădureanu.

The decision was announced on Thursday by the company. Hundreds of workers came to the plant in Jucu, after receiving a text message on their phones from the Nokia management.

They were gathered in a tent erected in the plant yard, where they had a talk with the management representatives of Nokia Europe.

One of the workers said that employees of the plant booed the directors.

"People booed, of course. They talked... everything was confidential. Nobody cried, but people were affected, of course, like it happens when you are left without your job. The work plant activity will be stopped until tomorrow night. In the last period it was low. Even the production was low, but we continued working", the worker said.

The employees who participated in the meeting said they were officially announced that they would be dismissed and that the plant would be closed by the end of the year. But they would receive wages until March 2012.

"The Nokia plant closure will increase unemployment in Jucu", Florin Stamatian, the prefect of Cluj, said.

"It is a very difficult time for Cluj, but if you want to talk about numbers, to delude and comfort ourselves, the unemployment rate in Cluj will be 4 percent instead of 3.5. There are times during economic booms when they say that an unemployment rate below 4 percent is unproductive, but unfortunately we are not in that situation", Florin Stamatian said.

The prefect of Cluj regrets Nokia's departure from Cluj, because it is a very important and well known brand.

According to him, another problem is that the horizontal industry will be affected too, such as security, transport or catering firms working for the Nokia plant in Jucu.

In this context, the County Agency for Employment of Cluj will require financial support from the European Commission to combat the effects of the plant closure.

The money would come from the European fund to fight globalization, according to the agency's director, Daniel Don.

"The Agency has made a plan in the morning about the situation at Nokia-Jucu. Cluj and the Cluj Agency through the National Agency will access the fund to fight globalisation. It is called EGF and is designed for collective redundancies of more than 500 people. The amount that we can ask for this collective redundancy is over 10 million", the manager of the agency said.

Daniel Don said that in his opinion, the 1 956 employees fired by Nokia would be able to find work easily. According to him, the market is looking for assembly specialists. On the other hand, people say that they do not know if they will be able to find jobs given the economic crisis.

The Nokia Jucu plant had a turnover of around 1.2 billion euro last year. It was the most important exporter in the county. Some economists estimate that revenue of the authorities in Cluj will be reduced by 30 percent after the plant is closed.

Cluj County Council established a commission to examine the contract with Nokia

The closure of the Nokia plant in Jucu, an investment of 60 million euro, will cause significant economic losses for the county of Cluj.

Cluj County Council decided to establish a commission to analyse the contract with Nokia and see if they can get the money allocated by Romania.

The head of the PSD councilors of the Cluj County Council, Valentin Cuibus, who proposed the creation of this commission, estimated that Romania would have invested over 20 million euro.

"Let us see to what extent Nokia, which clearly has not been open to a discussion with the County Council, fulfilled all the contractual obligations and to what extent they will have to bear the expenses that have not been small and the County Council has covered to solve the infrastructure in this area", Valentin Cuibus said.

The liberal Marius Nicoară, who was president of the Cluj County Council when the the contract with Nokia was signed, argues that the reasons to close the plant in Jucu are related to economy, because their costs have increased since the government increased the value added tax and the taxes on salaries and pensions.

In addition to this, the Romanian authorities has not honour the commitments made ​​to the Nokia company.

"Knowing the contract and the commitments that the County Council and even Romania, took in order to keep this investment here and in order for it to expand, I was able to see that those commitments were not being fulfilled", Marius Nicoară said.

Translated by: Denisse-Meda Bucura,
MA Student,MTTLC, Bucharest University