CHENNAI: Nokia Corp on Tuesday decided to suspend operations in its Sriperumbudur mobile handset plant from November 1 after Microsoft terminated an agreement to buy mobiles.
Company union sources alleged that even before the second tax bill was slapped on Nokia, the company had started exploring ways to shut down the plant. “They shifted a large part of the orders to their facility in Vietnam soon after the IT department froze their assets,” said Saravanakumar, Nokia India Employees Union leader.
The phased transfer of orders meant that the plant’s production was gradually cut to less than 2 million handsets a month by January. While the company continued to assure its employees that it would not shut the plant, it announced a VRS offer for its permanent employees in April.
The offer, valid for only a month, saw protests by employees suddenly faced with their deepest fear — unemployment. Eventually, protests and representations to the Assistant Commissioner of Labour (ACL) notwithstanding, over 5,000 staff accepted the offer.
Meanwhile, the company also found a way to complete the Microsoft deal without resolving the tax issues. It simply left out the Chennai plant from the deal and decided to run it as a contracted manufacturer. The only downside was that with production down to just about 1 million handsets a month, it was only a matter of time before Microsoft terminated the agreement.
Now that their worst fears have been realised, Nokia Sriperumbudur’s remaining 851 permanent employees are uncertain on what course of action to take other than preventing the suspension of production. “We have a meeting with the ACL regarding this on Friday. Because once production stops, it will only be a matter of time before the company shuts down the plant,” Saravanakumar said.