Nokia town looks tough times as jobs shift to Asia

"I was the worker in the family, and now its complex making ends meet," the 39-year-old said, at the local metal workers union club which is used by the town's jobless as a meeting place. "It's the alike story for so many people I know from Nokia days." Salo - along with other Finnish towns inextricably allied to Nokia - is facing an uncertain future as Finland's most famous firm shifts its mobile phone assembly to Asia.

 Squeezed by fierce competition from Apple Inc's iPhone, Samsung Electronics and cheaper brands running Google Inc's popular Android software, Nokia has been enforced to slash costs, primarily affecting its operations in Europe. Nokia has previously closed plants in Germany, Hungary and Romania; and now it's the spin of the Finnish assembly place. Some 1,000 of the 3,500 jobs in Salo - which until newly was Nokia's flagship assembly hub - are being cut this year. The once-thriving technological center has already become a town of dusty, blank storefronts.

 The newest layoffs will hit us firm," said Salo's mayor, Antti Rantakokko. He has a glittery office in a glass-plate and metal building that opened four months ago, partially paid for by Nokia's local taxes, which accounted for 95 percent of the town's shared tax income that peaked at (euro) 60 million ($78.85 million) in 2010. "Nokia has been a status body for us, but more than that it has been a major cause of revenue," Rantakokko said. 

 The company began as a paper-maker in the 1890s, and later made rubber products, cables and televisions before it came to Salo - a hub for Finland's electronics industry since the 1920s - in 1983. Nokia created an alliance with a local radio and TV producer, which led to the formation of Nokia Mobile Phones in 1989. Two years later, the company produced its first cell phone. Steered by chief manager Jorma Ollila, Nokia became the world's top cell phone maker in 1998 when it overtook Motorola Inc in terms of sales - a major spring of pride for a country that had struggled to rebuild itself after fending off Soviet invasion during two wars beside Stalin's Red Army.

 Nokia became Finland's biggest firm, overtaking the paper and wood business as an export earner and provided work for thousands. In 2007, it paid out a record (euro) 1.2 billion ($1.57 billion) in corporate taxes to the government. Nokia reached 40 per cent global market share in 2008. However, sales quickly started to lag as the company suffered below the onslaught of inventive mobile technologies from the US, the world's biggest wireless market. Profits swung to losses and the struggling company's tax payment dished to some (euro) 2 million last year.

 "There's no denying it has been a great distress to the government, but there's not much they can do," said Jyrki Ali-Yrkko, from the Research foundation of the Finnish Economy. Nokia's substance to the vulnerable, export-dependent economy was illustrated by the flood of aid the government quickly earmarked to regions hit by the company's cutbacks. Finnish President Sauli Niinisto, who hails from Salo, visited Nokia's stand here on March 20 in a display of support for the laid-off workers. "We won't ditch our friends and we won't provide up," Niinisto told journalists.

 To the dismay of many Finns, Nokia has slowly loosened its ties to its home nation. It remains head quartered in Espoo, outside Helsinki, but in 2010, it agreed a non-Finn to head the company for the first time while it named Canadian Stephen Elop as chief supervisory. That led to a major strategy move last year as it joined up with Microsoft Corp, Elop's former employer, to replace Nokia's platforms with Windows software in its cell phones. Nokia still employs 12,000 people in Finland, one-fifth of its entire workforce, and the company will maintain examine and development, creation planning and Smartphone customization for business clients in Salo and two other floras in Finland, Nokia spokesman James Etheridge said. 

Finland has been and will persist to be critical to our victory. The majority of the Windows Phone engineering and development team is in Finland, Etheridge said. Government has provided the metropolis with an extra (euro) 5 million over two years to deal with the impact of Nokia's downsizing. "The layoffs are a tart blow but we can't let it catch us down," Rantakokko said. "Nokia will still have 2,500 workers here and will remain important to us." "There is a nominal pool out there, soon out of work, and the dispute will be to find a use for it," Rantakokko said.