Finnish Telecom company Nokia announced on Monday that it will be closing down its manufacture of mobile devices in Bochum, Germany closing its site there by the middle of 2008. The company said it plans to move the manufacturing to other, more cost competitive sites in Europe.

The company said it will cease all other activities at its Bochum site and will sell its line fit automotive business. Nokia is currently in negotiations with Sasken Technologies to sell the Bochum based adaptation software R&D entity.

The closure of the Bochum site is expected to affect around 2,300 Nokia employees.

According to Nokia the decision was made to close the site because of its lack of competitiveness. Nokia claims that renewing the site would require additional investment, but that such investment would still not make manufacturing in Bochum globally competitive.

The planned closure of the Bochum production site is necessary to secure Nokia's long-term competitiveness, Veli Sundbäck, Executive Vice President of Nokia and Chairman of the Supervisory Board of Nokia GmbH said

Due to market changes and increasing requirements for cost effectiveness, production of mobile devices in Germany is no longer feasible for Nokia. It cannot be operated in a way that meets the requirements for global cost efficiency and for flexible capacity growth. Therefore we have to make this tough decision.

Nokia has said that it will begin consultations with employee representatives as soon as possible in order to reach a satisfactory solution for all parties concerned.

The company said the financial costs associated with this restructuring and the consultation process will be determined and reported in Nokia's quarterly reporting for 2008.