Nokia’s Chennai plant, which is the focus of a tax dispute with the Indian authorities, could remain under Nokia control even after the company has sold its mobile division to Microsoft.
The company’s interim CEO Timo Ihamuotila told Yle that the company has contingency plans.
”If it so happens that the factory does not transfer to Microsoft, then our intention is to provide services for Microsoft for a period of time, ie to make mobile phones at that plant,” said Ihamuotila.
”During that period when we provide these services to Microsoft, we will look in this difficult situation to find the best long-term solution for both the factory and the workforce.”
Ihamuotila denied that Nokia planned to close the plant, despite falling sales. The facility currently employs some 8,000 people.
”We don’t have any plans like that at the moment, (although) we have offered voluntary redundancy packages to workers in Chennai,” said Ihamuotila. ”This is naturally because we have to adjust the number of workers to the number of phones produced there.”
Ihamuotila also re-affirmed his belief that the Microsoft deal will go through on time despite delays.
”We now expect that the deal will happen during April, but it is also difficult to predict official approval processes,” said Ihamuotila.
Nokia is currently being pursued by the Indian tax authorities for what they claim is unpaid VAT to the value of around 300 million euros. The Indian government claims that phones from the factory were sold in Tamil Nadu, so the sales tax is due, but the company claims that devices produced there were exported.
