Nokia Sells (not the) Last Europe Based Factory; Salo, Finland
Following with Nokia’s strategy of cutting costs and moving manufacturing factories to Europe and South America, the Salo factory in Finland (announced to be shut down earlier this year) has now been officially sold to a drug manufacturing company. With it ends the era of Nokia phones stamped “made in Finland”; moving on to phones coming from Korea, Brazil, Russia and mostly China. Without mincing words this is a huge blow for Nokia’s Finnish pride, here in the Middle East phones made in Finland have a greater value to costumers, usually making them willing to pay up to $50 more than the same phone that’s made in China. Silver lining is there are no more factories left to close…
Update from Jay:
We got word from Nokia that the Salo plant is not the last European Nokia factory. Nokia still has a factory in Komárom, Hungary.
Category: Nokia
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Hopefully this means new jobs for the area, instead of just letting the factory rot closed, I think that is another major silverlining.
All of Nokia’s competition moved mobile phones manufacturing to Asia years ago, Nokia was the last stalwart manufacturing in Europe.
It was the last stalwart manufacturing in Europe? I remember RIM manufactures much in Hungary…
Anyway the precise reason Nokia’s hardware has earned its name is due to being manufactured in Europe! This really is a huge blow but then we hope that a few years down the road a rejuvenated Nokia brings back some manufacturing to Europe and continues to give us its famed quality!
no, quality gave its name, not where it was manufactured. If they can keep the quality up very few people will sig to find in which plant it was manufactured. Not to mention that large majority of Nokias have been for years and years been manufactured/assembled outside of Europe.
I guess Nokia may still be manufacturing in Hungary at their Hungarian plant? But I think the writing is on the wall: mobile phone manufacturing is moving to Asia and Nokia is the last one to have factories in Europe.
The plan announced earlier this year was that the Hungarian plant was to be converted to a regional customization facility with no actual device assembly. If you remember, that was also the earlier plan for the Salo factory before the latest (IMO desperate) round of cuts. I don’t know if the factory in Hungary has already made the transition, but I would suppose that it will very soon if it hasn’t already.
Good point. And yes, I do remember. And I also remember Salo was converted to this mode for a while – until the summer showers hit.
viipottaja, I have to disagree with you on this one.. All of the people I know that buys Nokia, including myself, will not buy a Nokia unless if it’s made in Finland… Yes, we know it’s a Nokia.. But, if it’s not made in Finland.. it’s a no go..
And that’s quite silly.
So buy a Nokia instead or an HTC or Samsung….
Oh but wait they’re all manufacturing in Asia, hmm.
So your just imposing this standard on Nokia alone?
Yeah as someone else has already mentioned, that is just silly!
As far as I know RIM cut its Hungarian manufacturing, which wasn’t its own factory either.
thank the energies my n8 was built in europe’s
mine was built in china and nothing wrong with mine
A number of Nokia phones I owned are also made in China, including my X3, 6700 Slide and the 800. No problems either.
China manufactures quality phones for nearly all major mobile companies…
Quality control is the no’ 1 issue when dealing with Chinese companies, but thinking of China as a whole with same issue is frankly old fashioned.
Anyone who trades with China on a day to day basis knows that although quality needs to be closely watched, the gap in production quality and consistency against US & European manufacturing is closing swiftly. The cost for manufacturing in China is getting higher all the time, as they are in the process of making this transition…
Does it really matter where it’s assembled? I thought the “assembly” in Salo was just final assembly, essentially screwing together components that all came from East Asia.
What I really want to know is if Nokia uses contract ODMs like Foxconn to build its devices in China and Brazil, or whether it actually has its own operations.
Nokia has several own factories (in China, South Korea, Brazil at least off the top of my hat), and are building a new one in Vietnam, but it does also use companies like Foxconn.
India too e.g. building Ashas.
i have my 6630 from Finland. oh well, now i’ll be on a antiquate shopping spree to get N9, N95, and other unique phones before Nokia ceases its existence.
Nice job $%^&*( IDIOT Elop you have crashed nokia
Not a single Apple iPhone or iPad has ever been manufactured in its home country. ALL made in China.
It is the reality to compete . .
End of an era. Salo is where it all started with Salora (Salo Radio).
“In 1966, Nokia and Salora started developing the ARP standard (which stands for Autoradiopuhelin, or car radio phone in English), a car-based mobile radio telephony system and the first commercially operated public mobile phone network in Finland. It went online in 1971 and offered 100% coverage in 1978.[30]
In 1979, the merger of Nokia and Salora resulted in the establishment of Mobira Oy. Mobira began developing mobile phones for the NMT (Nordic Mobile Telephony) network standard, the first-generation, first fully automatic cellular phone system that went online in 1981.[31] In 1982, Mobira introduced its first car phone, the Mobira Senator for NMT-450 networks.[31]” – Wikipedia
For some reason I had never made the connection that Salora came from the words Salo and Radio.
Thank you for posting this.
Obviously a sad moment for us Finns (especially technology-loving ones).
Sad Sad Sad Day
Doubly sad because I was hoping Jolla or another phone manufacturer would acquire the plant, but a drug factory? sigh
Jolla probably does not even want to own factories and in any case they would not have the money to buy a large factory at this point. As for other phone manufacturers; who would want a factory in Finland, which is no longer close to component manufacturers (all of them moved their production to China etc. during the last decade) and has European employee costs (high wages and mandatory benefits).
It’s great for the local people that they will get at least something to that factory, albeit it will only provide about 100 jobs and some of them will be transfers from Espoo and Turku. They will be doing logistics and packaging, not actual manufacturing of drugs (pharmaceuticals factories are expensive and Orion currently has no shortage of manufacturing capacity).
when will you see swipe ui? Jolla can offer money for you. Please take it because i know You are desperate for cash these days!
Means lesser losses
They didn’t sell the whole factory if I remember correctly. I think this agreement was mainly about the storage and part of the factory side.
Plus there is a research and development center in Salo which is highly involved in developing 920 and 820.
PS. I reread the Finnish article in aani.nokia.fi where the correct wording is: Parts of the Storage and factory.
Yes, let’s move all the factories to China! Let’s take jobs away from people in Europe and USA, and instead give it to Brazilians and Chinese. And then, let’s expect Europeans and Americans to buy our $600 phones. Because, honestly, how many Lumias did they sell in Brazil?
And we still wonder why is China so powerful…
We are discussing final assembly, QA, packaging and some logistics. I suspect the PHARMA company that bought the factory will be also looking for similar talent; at least I hope this is the case for those out of a job.
Most of the core components are already made in Asia. Apple and Samsung have already dispelled the Made In Europe premium difference (at least for Smartphones) and have also proven speed to market and costs can remain more than competitive as a result of this shift.
Two things; Nokia can’t run on air, it needs profits. They cn keep manufacturing in Europe, but when your competition is moving to Asia and can manufacturer at a lower cost you will need to follow. Otherwise your competition can either undercut you on price or they reap more profits which they can invest in new products and essentially beat you in that area.
Secondly, look how many people are already yelling and screaming that the 920 is too expensive. If Nokia would keep manufacturing in Europe they would have to eitehr keep such high prices or make them even higher in order to keep a healthy profit margin.
I’m all for keeping jobs in Europe, but a company acan’t be a humanitarian all the time. Especially when the competition is as fierce as it is in the telecoms business.
Nokia were making profits, not air, until 2011.
So if it’s a matter of labour costs, either the european job market suddendly became much more expensive one year ago, of which I see no evidence, or this “can’t be done otherwise” excuse I keep hearing is groundless.
Did it not even occur to you that in 2008 already most Nokia phones were made outside of Europe?
Groundless? Just like the ‘Nokia were making profit up until feb. ’11′ I keep hearing. It is always insinuated that they would keep on making a profit well into 2012 if they stayed the course. One doesn’t know that and can’t know/claim or even be remotely sure that they would have.
The WP strategy has sucked so far and brought bysmal results not fit for a company like Nokia. But if someone wants to claim that Nokia would have been profitable right now based on results they had in the past is just beyond me.
PS: Not really meant as a reply to you Joe, but I’m so sick and tired of the same thing over and over again about how Nokia WAS doing and how that would translate into the present. And do bear in mind, I do say that WP only sucked for Nokia, that doesn’t mean that I dislike WP nor Nokia because of it.
I was not talking about Elop / Windows Phone / Feb. ’11. I’ve already said everything I cared to say back then, and I haven’t said a word about that ever since. I’m specifically talking about the question of manufacturing in Europe, which is close to my hearth.
The year 2011 came out only because I googled Nokia’s profit margins and it turned out that 2011 was the last year during which they were positive. So if in 2007 the Salo plant was open and Nokia were making big profits, I’ll need somebody to show me exactly what changed between 2007 and 2012 to justify the closure: China was already China in 2007, and Europe was even more Europe back then.
Similarly to you, I’m tired of being constantly fed with bad news and propaganda, in my case about how it’s impossible to keep our lifestyle because this pagan deity called “the Market” requires constant human sacrifices to be pleased. Every sacrifice is always accompanied by the promise of future reward, except that while the loss is immediate and dearly felt, the promised joy never materialises in the end.
This time the sacrifice Finland has to withstand is to lose Nokia to the Chinese. Doesn’t matter if manufacturing costs have gone *down* in the last years, and manufacturing only makes up a small amount of a phone’s shelf price.
As a company, if you outsource the manufacture of your products, it’s only a matter of time before the manufacturers, thanks to the knowledge and competence that you’ve transfered to them, skip the middle man and start producing stuff of their own initiative instead of working to make you rich (see Asus, HTC, ZTE…). Shall we bet that we’ll have a hard time competing with them once that happens?
I wholeheartedly agree with your whole post. We Europeans need to stop the nationalism nonsense, become a strong federation (like the US), and start caring for the citizens (unlike the US), not The Market.
Pretty spot on.
WP strategy hasn’t been Nokia’s saviour in any way shape or form, in fact Lumia could be a Meego powered mobile and still be sht hot in form factor, hardware differentiators and quality Nokia apps…
But neither is it WP strategy which has them in current situation.
Think, N97, X7, E7, C6, 5800 etc…, Even the mighty N8….
Ever heard of Komarom, Hungary? It is part of Europe, even EU, and Nokia has a factory there.
For now.. Nokia also had a factory in Romania, but closed it up as well. Komarom is to follow, no doubt.
Exactly
How about Germany? Is it still up and running?
Didn’t they close the Romanian one?
I take you are referring to Bochum plant? Closed several years ago.
Truly a “Where” company, LOL!
Where is Nokia?… Oh, that’s right, on the bottom of the ocean.
well for information of many people crying about the closure of salo assembly line, the factories in romania and hungary manufactured nkthing but only lowend feature phones or a fee very lowend symbian dumb smartphones.
All consumer electronics is manufactured in asia , yes but Stupid Nokia eventhough showed smartness by tapping into asian low cost manufacturing in china, korea and india yet it waw cowardly by not closing european factories due to political fears that EU might not like it this and that closure of factory in germany might have given Nokia some nightmares. Another problem with salo, is the nostalgia but look into past records they have been consistently downsizing there and at the end i guess it had 800 folks only…
Business is busineds not charity thanks to Nokia for understanding it and now closing these 3 unwanted production sites. THANKS MR.ELOP
last point is about quality, i have used finland made phone, now i am typing this post from a korea made N8; they have same components and same quality…these are all made by Nokia in their factories. Only good thing with salo was it’s close to Nokia’s finland design studio and hence electrical , mechanical and industrial designers could rapidly prototype the stuffs but now tney have to travel more to asia to get the pre production samples
I do have a feeling that Nokia has been hijacked completely. What Nokia has anymore in Finland? Some software-engineering and headquarter. How long it will take that also the headquarter will be moved to somewhere else (wild quess: to USA)? I think it is going to be obvious given the fact that Elop says something and then acts totally opposite way…
I feel definitely sad. Nokia does not have anymore own smartphone OS (no, I don’t consider S40 Touch to be one), manufacturing is moved away and stock rate is very low. How much worse it can still go?
Nokia all in for WP even if it means cutting out loyal customers, selling off factories and office space, giving away ecosystem advantage, firing labors.
Wow the WP strategy is working out very well and if you’re not happy, tomorrow will always be better. Yes only the OS called WP is considered the best and nothing could be better then this. Tomorrow, Tomoorrroww we celebrate when the WP ecosystem succeeds.
Not tomorrow, after Q4 results! Get with the program, man.
I forgot to put the /s
I’ve owned both Finnish and China made N8-00. Same quality. It’s all in the QA and Nokia does run a tight ship on that.
It is sad to see homegrown business leave. Here in California, USA, we are having businesses uprooted and moving to Texas, USA because our idiot Governor wants to tax them into oblivion and give the money away to those that don’t want to work and know how to scam the system. Our unemployment is over 13%, with Los Angeles County having a higher population than all of Finland, you can start to see the distress we’re in.
However, Nokia Design Center in Calabasas, CA, a stones throw away from my apartment, is still open.
I don’t esteem Elop that much, but I must give him this one. Good riddance.. the overpaid, under-working Europeans need good flogging.