Case study of Nokia production relocation

SIB 101-B Blobalization
Fall 2011

Assignment 2 (Due on Dec. 5, 2011)

Multinational corporations (MNCs) play an increasingly important role in the economic activities of the world. Most governments welcome the MNCs for the potential positive contributions to their economy. Occasionally, their operational and investment decisions create some problems for their host as well as home countries. One such decision is a plant closing.

In 2008, the Nokia Corporation had decided to relocate its production in Bochum, Germany to Cluj, Romania. Recently, Nokia announced that it decided to close the Cluj, Romania factory at the end of 2011. Naturally, various constituencies raised serious concerns about the Nokiaas plant closing decision.

Below are some links to the coverage of this topic by the Deutsche Welle of Germany. More information can also be found from the other media coverage. After gathering and reading the information on this topic answer the following questions:

a? Why did Nokia close its factory in Bochum, Germany?
a? What kinds of conflict did this factory closing caused for the host-country Germany, and were they resolved if at all?
a? Why do you think Romania was chosen as the new factory site? What has changed since 2008 to make Romania an unattractive place?
a? What will be the consequence for Romania of the Nokiaas decision?
a? Do you think Nokia is paying enough attention to its corporate responsibility? Explain

Nokia factory closure spells lights out for workers in Cluj

Three years ago, Nokia announced it would close a factory in the German city of Bochum to move to a cheaper facility outside Cluj, Romania. Now, the factory in Cluj is set to be closed at the end of the year.

Nokia is painfully packing up in Europe
Nokia effect lures investors to Romania
Nokia Plant Closure Draws Germanys Attention to Bochum