Nokia union alleges output cut at Chennai plant

Last Updated: Fri, Mar 28, 2014 05:30 hrs

Chennai: Nokia India Employees Union has alleged the company has cut output at its factory in Sriperumbudur, near Chennai, to between one and four million units a month from 13 million units and shifted manufacturing of Asha cellphones to other countries.

It is planning a hunger strike on Monday in Chennai, demanding job security, as the transfer of the factory to Microsoft, which bought Nokia's devices business, is stuck in a tax dispute.

The union has demanded that the company should make arrangements to transfer the facility to Microsoft as per the global agreement between Nokia and Microsoft.

A Soundararajan, honorary president of the union and state president of the Centre of Indian Trade Unions, affiliated to the Communist Party of India (Marxist), said, "We won't accept any move from the company to either remain as a contract manufacturer for Microsoft or retrenchment."

He alleged that the company has shifted the production from the facility and has reduced the number of shift from three to two, almost three to four months back. While the facility was manufacturing around 13 million units a month prior to that, it has been brought down to 1-4 million units a month, shifting the rest to the rest of the country.

The union also alleged that the company has shifted the production of Asha series of phone, which was completely manufactured from the Sriperumbudur facility earlier, from the plant. "We have been thinking that Asha would remain here and it would support the facility to grow," he said.

A Nokia spokesperson said, "We don't comment on internal planning or production. Nokia is a global company. We consistently look for ways to optimise production."

He added that the employees were further anxious about their future, since the State government has also levied a Rs 2,400 crore sales tax claim on the company. He added that if the company has to pay the taxes, it has to pay and it is the duty of the central and State governments to collect the taxes as per the rules.

"All that we are worried is of the job security of around 20,000 workers, including the 8,000 direct employees, in which 60 per cent are women," he added.

M Saravanakumar, president of the Union said that the union would pursue the matter with the Labour Commissioner, regarding the job security. The union has earlier submitted a petition with the Labour Commissioner regarding this.

"We have worked in a transparent and constructive manner with the labour reps since this tax case started, we will continue to do so," said Nokia spokesperson.

The union would be conducting a one day hunger strike in Chennai on March 31, raising the demand. It would also approach the State Chief Minister J Jayalalithaa for protection of the job of employees and would strengthen the agitation after the Lok Sabha election, he added.

The Union also demanded the central and state government not to allow any move from the company to transfer its subsidiary, Nokia India Sales Ltd, the marketing arm formed in 2013, without the transfer of the manfuacturing facility to Microsoft.

The development comes at a time when Nokia Corporation has announced that it will transfer its assets to Microsoft, which agreed to buy Nokia device and service business for Euro 5.44 billion. However fate of Nokia India Pvt Ltd, under which the manufacturing unit at Sriperumbudur is coming, remains uncertain due to the income tax dispute.

The Apex Court on March 14 ordered Nokia to give a Rs 3,500 crore guarantee before it transfers one of its biggest plants globally located at Sriperumbudur, around 40 kms from Chennai, to Microsoft. The Order upheld a lower court verdict over the plant, which is the subject of an income tax dispute, and had been challenged by the Finnish company. Over and above last week, Tamil Nadu Sales Tax Department has slammed a Rs 2,400 crore notice on Nokia stating that the company has been selling whatever produced from its Sriperumbudur facility in the domestic market, but was not exporting. In response to the notice Nokia filed a writ petition with the Madras High Court and said that it is a baseless claim by the Department.