Nokia in talks with Microsoft to keep controversy-ridden Chennai unit running

Written by Sajan C Kumar | Chennai | Updated: May 24 2014, 14:04pm hrs
NokiaThe strength of the Nokia's Chennai plant workforce has come down to around 850 from 7,000 earlier. Reuters
Amid uncertainty over the fate of its controversy-ridden Chennai plant, Finnish telecom major Nokia has said it has been in talks with Microsoft the new owner of its erstwhile devices and services business to keep the plant up and running.

A Nokia spokesperson told FE: Due to the liens set on the Chennai factory and the uncertain environment, Nokia in discussion with Microsoft continuously assesses volume requirements and plans production accordingly. due to tax litigation, the plant was kept outside the Microsoft-Nokia deal, under which the latter sold its entire devices and services business for $ 7.2 billion. With the plants employees taking to agitation, Nokia signed a service agreement with Microsoft to produce handsets on a contract basis, at least for one year.

Nokia, simultaneously, introduced a voluntary retirement scheme (VRS) for the workers, along with a 'Bridge' programme to help them find jobs elsewhere.

The strength of the Chennai plant workforce has come down to around 850 from 7,000 earlier. The facility is now running with these few hundred workers following the closure of the VRS scheme this month, wherein Nokia had claimed that around 5,000 people have opted for it. According to union sources, around 730 temporary workers had taken VRS.

When asked how Nokia plans to run the Chennai plant with a few hundred workers, the spokesperson further said: On the basis of recent developments, production capacity has been aligned and we remain confident of delivering it to Microsoft. Our intention remains to keep the factory operational and deliver against our services agreement.

According to sources, during the past few months, production at the Chennai plant had come down to 2 million pieces a month from 13 million earlier. The company had reportedly shifted production of the Asha series from here. Industry sources, however, said that with a few hundered people remaining, production is likely to decline drastically.

The rest of the workforce is worried that since a majority of employees have opted for VRS, and as orders dwindle, things may have come to a flashpoint where collective bargaining has become increasingly difficult. They want the chief minister's intervention.

R Soundararajan, honourary president, Nokia India Workers Union, had told FE it was now for the Tamil Nadu chief minister to look into the matter seriously as the remaining permanent employees cannot be asked to go one fine day.