It’s clear that Nokia’s closing of their German plant has incensed the Germans to no end. Like a crazy girlfriend scorned, the state-owned NRW.Bank has sent Nokia a demand for the return of subsidies provided to open the Bochum plant. Here’s the kicker, NRW.Bank wants the subsidies refunded with interest. Germany already demanded the return of subsidies, but there was no mention of interest. The juice has apparently been running since 1998, and with loan amounts in the tens of millions, the interest is going to be heavy -$29 million worth of heavy.
Germany subsidized Nokia’s build-out of the Bochum plant on the condition that it create a minimum number of permanent jobs. Nokia received about $63 million in 1998 and 1999 from the German government. But, with Nokia’s move to close the plant, cutting 2,300 jobs in the process, Germany claims that Nokia has failed to meet the subsidies’ conditions.
NRW is demanding that Nokia refund the $92 million by March 31st, or legal action will be taken against Nokia. The state economy ministry said that “a meeting will be offered in the next few days,” in response to Nokia’s request for talks on the matter.
Nokia has said that it “not only fulfilled the conditions of the agreement, it exceeded them.” And, to help soothe things over with the German population (especially those 2,300 that lost their jobs), Nokia’s Chief Olli-Pekka Kallasvuo apologized for the plant’s closing but deemed it necessary.
Right, let’s see how this one plays out. Germany doesn’t really have anything else to gain other than the $92 million, and it’s not like Nokia is going to reopen the Bochum plant. So, it seems like there’s going to be a repayment of funds, or another legal battle…