Helsinki (22.04.2015 - Heikki Jokinen) Nokia’s acquisition of the business operations of the French telecoms equipment company Alcatel-Lucent is about to be realised. The news has made Finnish trade unions worried for jobs.
The merger of two major companies will probably mean job cuts, but where? Nokia has set itself the goal of saving 900 million euro by 2019 through ”operating cost synergies”.
Nokia has promised not to cut French jobs for two years after the deal is signed. It has pledged its intention to establish a 100 million euro fund to invest in start-ups in France.
Nokia also intends to maintain employment in the ”key sites” of Villarceaux and Lannion.
”In addition, the company expects to expand R&D employment with the addition of several hundred new positions targeting recent graduates with skills in future-oriented technologies”, according to the stock exchange release of the promises given to France.
According to the French newspaper Le Monde the French Minister of Economy, Emmanuel Macron has given his assurance that “there will be no job losses in France”.
“The number of jobs will be the same and even more. We had all the commitments on the part of Nokia “, Macron said. ”I will be extremely vigilant in preserving jobs on all French production sites.”
"There is nothing extraordinary in the commitment to France, nothing that wouldn't make business sense," said Nokia CEO Rajeev Suri to Yle News. "When you do deals with France involved, you want to make sure that the government endorses your deal, understands the strategic rationale."
These kinds of negotiations are obviously not needed in Finland. The Finnish Minister of Finance, Antti Rinne told the newspaper Hufvudstadsbladet that he wants the Finnish government to negotiate a similar deal with Nokia about Finnish jobs. His statement was made after the business deal was published.
Antti Rinne is leader of the Social Democratic Party and former chairperson of the Trade Union Pro.
Cutting jobs too cheap in Finland
Jorma Malinen, chairperson of the Trade Union Pro says that trimming the organisation may affect Finland, as we have already seen with several other international mergers.
”Unfortunately these opinions garner support from the guarantees Nokia gave to France in the form of promising no redundancies and founding an investment fund in France. Letting workers go is all too easy and cheap in Finland.”
Pertti Porokari, chairperson of the Union of Professional Engineers in Finland IL explained to Reuters that at first the deal sounded like very good news.
”But given that there will likely be job cuts, and the fact that it is much more expensive to lay off people in France than in Finland, the outlook is not that bright anymore. I truly hope that Finnish politicians will also show some patriotism here."
To the newspaper Iltalehti Porokari pointed out that the dismissal of an engineer costs next to nothing in Finland. ”The only obligation we have is to pay salary for the period of notice and the employer can require full working capacity for that time. In this case it doesn’t cost anything.”
According to Porokari in France there is a three-step system to pay compensation when it comes to termination of employment, and which is linked to the time served in employment. This may amount to tens of thousands of euro per person.
Jorma Malinen endorses this view. ”Finnish labour market legislation is badly behind the national and international changes in the labour market. For a company that works in many countries it is profitable to make the major redundancies in Finland as it is almost free for the company when done according to the law.”
Matti Tukiainen, the director of employment and collective bargaining at the Central Organisation of Finnish Trade Unions SAK is also worried about Nokia jobs in Finland.
”According to the OECD statistics employment protection Finland is below average and in France above average.” He is afraid that job cuts may affect Finland disproportionately.
Tukiainen says that the business deal is a brave decision, one that engenders more trust for the future of Nokia. ”But employees should not be the ones who pay for the expansion.”
The new company will employ some 114,000 people, about 40,000 of them in Europe. In Finland, Nokia has 6,855 employees. The 15.6 billion euro stock deal is Finland’s biggest business acquisition of all time.