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Nokia’s Chennai Dilemma: Staff Sends SOS

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By: Ishan Srivastava
On a hot summer day in 2005, Tamil Nadu chief minister J Jayalalithaa announced in the state assembly, much to the delight of members, that Finnish telecom giant Nokia would be setting up a manufacturing facility in Sriperumbudur. As summers flew by, the Sriperumbudur facility turned into the biggest for the telecom giant globally. It lifted the economic profile of the area, ushering in jobs for more than 20,000 people, most of whom were first-generation industrial workers, just out of school. The special economic zone (SEZ) became a hotbed for electronics manufacturing services (EMS) with a number of component suppliers setting up shop. In no time, the area was buzzing with activity as Nokia shipped phones from here to markets across the globe.

Ironically, nine years after the announcement, the same facility has been reduced to that of a contract manufacturer of mobile phones, with the factory assets frozen by tax authorities and employees staring at job losses. Union members allege work is being shifted out to Vietnam or elsewhere. Production is down to a third, non-production days have increased. Less work has led to fewer shifts and an employee separation scheme is underway. The atmosphere around the plant is tense. Simply put: A pall of gloom has surrounded the factory.

The future looks imperfect. The facility will only be a supplier, exclusively to Microsoft, under service agreement for a year, which is renewable thereafter. Apart from job losses, closure of the plant can potentially lead to more turmoil at the surrounding factories, which supply the unit with parts and services. Original post at The Times of India

Wahengbam Rorrkychand

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Website: http://www.blog.tonsetelecom.com

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