Nokia's Chennai factory might not become part of Microsoft deal, thousands of jobs at stakeWritten by Manish Singh on March 20, 2014 - 05:31AM @refsrc
With just 11 days left for the completion of Microsoft's acquisition of Nokia's devices and services division, it seems like the original 7.2 billion dollar deal may get revised. Nokia’s Chennai-based factory is reportedly not becoming a part of the original buyout.
A senior tax official states that the company has made it clear that it doesn’t want to be involved in this case. “Nokia Finland has made it clear to us that it does not want to get involved. They have also made it amply clear that they want to limit their liability to their assets in India. In such a situation, they have no option but to exclude the Chennai unit from the deal for it to go through within the set time frame,” the official said.
Whereas another official said that Nokia should negotiate with Microsoft, and until it resolves the dispute, it could run the factory on a contract basis. “If the deal has to go through before the final order, they will need to renegotiate with Microsoft and convince them. Nokia can run the company on contract basis for a limited period till the final SC order.”
Yesterday, a meeting between Nokia India management and factory’s union leaders failed to clarify the future of the plant. According to the union leaders, Nokia is now looking at its Vietnam and China factories, and thus Chennai-based plant’s production has been on the fall. This decline in production may cost some workers their jobs.
Naturally, the employees and chiefs aren’t in favor of Nokia’s apparent inclination towards its China and Vietnam factories. “Even today, level of production has come down drastically. They are moving work to factories in Vietnam and China. We will ask the government to stop this transfer of work," said A Soundarajan, State general secretary of the Centre of Indian Trade Unions (CITU).
Both the parties talked about protection of jobs and settlements, however, Nokia management awaits instructions from Nokia’s headquarters in Finland. "The main topic of discussion was the protection of jobs and the settlement going forward. However, the management was non-committal," said M Saravana Kumar, president of Nokia India Thozhilalar Sangam, the employees' union.
Last week, Supreme Court of India turned down Nokia’s appeal to overrule Delhi High Court’s verdict which ordered Nokia to pay 35 billion rupees as a fine. Nokia was originally supposed to pay 22.5 billion Indian rupees, until Delhi High ordered it to pay an additional sum of money as penalties and future tax claims in an escrow account.
"We will file a complaint to the labour department in the next 2-3 days. According to the Industrial Dispute Act, management must get permission from the government before retrenchment or closure. We will urge the state government not to grant such permission," Soundarajan said. "If the Nokia management will not come forward with a solution, we will agitate on the streets," he said.
Meanwhile, the president of CITU, AK Padmanabhan, said that until they get some official confirmation, everyone is clueless as what is going to happen next. “Workers don’t have any idea as to what is happening in the company. Even floor-level management does not know about the situation. There are a lot of issues worrying the employees. They want to know whether Microsoft is taking over, if assets will be disposed off, or if they will have to work for Microsoft. Fate of thousands of workers, contract workers, suppliers is in limbo. Our secretary general in Tamil Nadu is going to meet the local management of Nokia tomorrow to get a clear picture.”