The story of Nokia closing the last cell phone manufacturing plant in Germany is fascinating to me. As a self-employed businessman operating in Western Canada, I launched and operate my business with no government subsidies -- except for one: this small business pays a lower corporate tax rate than do larger businesses.
(Even that tiny assistance is seen as a distortion to the marketplace, because it could inhibit growth in small businesses should owners not want to pay the higher tax rate.)
Keep that in mind when you read about the closing of this plant:
-- Finland's Nokia is the last cell phone maker to move production out of Germany to a lower-cost region; Germany labour costs are 10x more expensive than Romania (although labor is a small portion of the cell phone's manufacturing cost).
-- Up to 2,300 employees may lose their jobs; they are in shock, because many worked overtime in December.
-- "Boycott Nokia," says a leader in the Confederation of German Unions, which will be losing up to 2,300 dues-paying members.
-- German government threatens to block European Union aid for relocation; EU says corporations no longer receive any, after the fallout from when the uber-government paid AEG to move production from Germany to Poland.
-- Politicians are calling for Nokia to repay the e88 million it received in subsidies; however, the EU's agreement with Nokia has expired.
-- A conservative EU parliament member wants the EU to cut corporate subsidies from e50 million down to a maximum of e20 million; Hungary pays up to 50% of high tech company's relocation costs.
-- EU president Jose Barroso admits, "If a shift from Finland to Germany is possible, then a shift from Germany to Romania also has to be possible."
In summary, European politicians are shocked, shocked! when corporations follow the rules set up by the EU and member governments.
In related news, I was pleased to read the Canadian government refuse Ford Motor Company's request for a $30 million subsidy to re-open a engine manufacturing plant in Ontario.