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Nokia to shift its Chennai plant to Vietnam, will staff agree?

By T E Narasimhan and Gireesh Babu
Last updated on: March 26, 2014 17:48 IST
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Workers at Nokia’s Chennai factory have objected to the company’s plans to transfer production orders to other plants. Earlier, Nokia said it had reduced the number of shifts at the plant and some orders were moved to the new plant at Vietnam. 

Nokia is keen to shift its Chennai plant to Vietnam.After a tripartite meeting between the Nokia workers’ union, management and Tamil Nadu labour department, on Monday, which concluded without any positive outcome, M Saravanakumar, president, Nokia India Thozhilar Sangam, said the union had given a written petition to the commissioner, seeking his intervention on three issues:

Job security for the workers; orders should not be shared with other plants in any part of the world; and the management should mention when they (the workers) will become part of Microsoft. A mail sent to Nokia officials did not elicit any response.

The development comes at a time when Nokia Corporation has announced that it would transfer its assets to Microsoft.

However, the fate of the Chennai plant, caught up in an income tax dispute, remains unresolved.

The Supreme Court on March 14 ordered Nokia to give a Rs 3,500-crore (Rs 35 billion) as guarantee before it transfers one of its biggest plants globally located at Sriperumbudur, around 40 km from Chennai, to Microsoft.

The order upheld a lower court verdict over the plant, which is the subject of an income tax dispute, and had been challenged by the Finnish company.

Over and above, the Tamil Nadu Sales Tax Department has slammed a Rs 2,400-crore ( Rs 24 billion) notice on Nokia, stating the company had been selling whatever produced from its Sriperumbudur facility in the domestic market, but was not exporting. In response to the notice, Nokia filed a writ petition with the Madras High Court and said it was a baseless claim by the department.

The union’s petition comes after Nokia India, according to Kumar, recently told workers the company might have to reduce number of staff in the factory, as the order flow had slowed down. Nokia India said, “We are disappointed with the earlier decision by the Supreme Court.

We have been doing our utmost to ensure our employees and assets can transfer to Microsoft. We are evaluating our options, and have no further comment at this point.”

The Monday’s tripartite meeting, which lasted for about 45 minutes, was attended by 12 workers, four members from Nokia management and the joint labour commissioner and others.

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T E Narasimhan and Gireesh Babu in Chennai
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