Nokia: We will stop all our phone production in Europe

HELSINKI (AP) – Nokia Corp. said Wednesday it will end the assembly of cellphones in Europe by year-end as it shifts all production to Asia in its latest attempt to cushion its finances from stiff competition in the smartphone sector.

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Nokia headquarter in Finland

The Finnish company said it plans to complete 4,000 job cuts at three plants in Finland, Mexico and Hungary this year as it reorganizes its global manufacturing operations to compete better with the likes of Apple Inc.'s iPhone and handsets using Google’s Android operating software.

The 8 percent workforce cuts bring total planned job cuts at Nokia since Stephen Elop took over as Chief Executive in September 2010 to more than 30,000. Nokia had 130,000 staff at the end of 2011, including Nokia Siemens.

“We would have no mobile phones assembling plants in Europe after this,” Nokia spokesman James Etheridge said. “We plan to focus product assembly at our plants in Asia where the majority of our suppliers are based.” Nokia said the shift to Asia would enable it to introduce innovations into the market more quickly and “ultimately be more competitive.”

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Monks buying cellphone top-up cards in Bhutan, Asia

Nokia, once the bellwether of the industry, has lost its dominant position in the global cellphone market, with Android phones and iPhones overtaking it in the growing smartphone segment. It’s also been squeezed in the low-end by Asian manufacturers making cheaper phones, such as ZTE.

The company has been the leading handset maker since 1998 but after reaching its global goal of 40 percent market share in 2008, it has gradually lost overall market share since. Nokia’s market share plummeted to below 30 percent last year, and is expected to be overtaken by Samsung this year.

Nokia’s Finnish factory in Salo, which was the cornerstone for its success in 1990s, has been the last remaining major phone assembly plant in the Western Europe for some time. Most rivals have moved their production to Asia.

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Booming Asia - develop and develop, out with old houses and in the modern skyscrapers

The Hungarian government said it regretted Nokia’s decision. Finnish unions demanded hefty cash payments to laid-off staff and Antti Rinne, chief of union Pro, said the announcement was damaging for Finland’s employment outlook. “Raising the employment level and prolonging working careers is impossible if there are no jobs in Finland,” Rinne said in a statement.

Nokia is Finland’s largest company, and Finland has pushed for years to prolong working careers as the Nordic country struggles with a shrinking work force and sluggish economic growth.

Emerging Asia has become the world’s manufacturing center, with mass employments continuously being created and rapidly rising wages. Asia continues to be at the forefront of wealth creation, creating millionaires at a faster pace than any other region in the world, despite the recent market meltdown.

Strong economic growth, coupled with the European economic crisis, have also changed the mindsets of Asians. They are now empowered with new ambitions and confidence that believe Asia would be the world’s economic future. The trend has been reversed, with the number of Asians immigrating to the West dropped considerably, while North Americans and Europeans seeking jobs in Asia reached new high.

Rolls Royce in front of the Peninsula in Hong Kong - Asian wealth is expected to triple in the next 3 years

Sebastian Dovey, Managing Partner of global wealth management consultancy, Scorpio Partnership, says Asian millionaires remain very optimistic about their wealth creation capabilities, despite the recent market tumble. "Most expect to triple their wealth fortunes inside a decade, and most of their investments are in Asia itself. This is in sharp contrast in the West where the mood is not growth but to protect and preserve wealth.

A Singapore-based private banker, who requested anonymity to protect his clients, said the behavior and risk appetite of Asian wealthy have changed significantly, "They (the clients) are happy if they make 50 percent and do not care if they lose 100 percent, this reflect the confidence in Asian economies, he said.

Private Swiss bank Julius Baer recently published a report that stated Asian wealth is expected to triple in 2015 to US$15.8 trillion, with their ultra high net worth individuals (those who have US$50 million or more) doubled from current 1.15 million to 2.82 million by 2015.

Source:

http://finance.yahoo.com/news/nokia-end … 01751.html

http://online.wsj.com/article/SB1000142 … 83074.html

http://www.chinapost.com.tw/business/gl … wealth.htm

http://www.bloomberg.com/news/2012-02-0 … -asia.html

http://www.reuters.com/article/2012/02/ … 1S20120208

http://economictimes.indiatimes.com/tec … 809091.cms

http://www.businessweek.com/news/2012-0 … -asia.html

http://www.newsday.com/business/nokia-t … -1.3513055

http://www.moneycontrol.com/news/wire-n … 64195.html

http://www.ibtimes.com/articles/294952/ … e-jobs.htm

In most corporate restructuring, always cut jobs but I dont see they cut CEO and other top executives pay & perks.

double post

Who would guess this will happens now 10 years ago?

Once the very strong company now is…i wouldn’t consider Nokia phones myself now…