Nokia to Cease Manufacturing Operations in Europe

Nokia Moves Production to Asia to Lower Costs

by Anton Shilov
02/08/2012 | 01:13 PM

One of the indisputable trumps that Nokia has had throughout its history is exceptional build quality of its handsets. Partly, this was conditioned by manufacturing in well-developed countries, such as Finland, Germany or Mexico. Due to massive losses that the company suffered in 2011 as a result of controversial management decisions, Nokia now has to move all of its productions to Asia to cut down manufacturing costs.

 

The three factories in Komarom, Hungary, Reynosa, Mexico and Salo, Finland are planned to focus on smartphone product customization, serving customers mainly in Europe and the Americas. Device assembly is expected to be transferred to Nokia factories in Asia, where the majority of component suppliers are based. The measures follow a review of smartphone manufacturing operations that Nokia announced last September and aim to increase the company's competitiveness in the diverse global mobile device market.

"With the planned changes, our factories at Komarom, Reynosa and Salo will continue to play an important role serving our smartphone customers. They give us a unique ability to both provide customization and be more responsive to customer needs," said Niklas Savander, Nokia executive vice president.

As a consequence of the plans, the number of steps in manufacturing and the amount of work carried out at the sites in Komarom, Reynosa and Salo are expected to decrease substantially. The changes are anticipated to impact approximately 4000 employees in total.

"Shifting device assembly to Asia is targeted at improving our time to market. By working more closely with our suppliers, we believe that we will be able to introduce innovations into the market more quickly and ultimately be more competitive. We recognize the planned changes are difficult for our employees and we are committed to supporting our personnel and their local communities during the transition,” added Mr. Savander.

Personnel reductions are planned to be phased through the end of 2012. Nokia will offer a comprehensive locally-tailored support program, including financial support and assistance with local re-employment.