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About a year ago, Nokia announced plans to build a cell phone plant in Cluj, Romania, and to begin manufacturing later this year. Two months ago, Nokia announced it would close its plant in Bochum, Germany,
There's a good reason Nokia chose Romania. Its labor costs are not as low as China's, but for European markets Romania is nearly the same as China on a total landed cost basis.
According to research by Technology Forecasters, Inc., Romania has the lowest labor costs of all European Union members. The results are in a Quarterly Forum Report, "Outsourcing Trends in Central and Eastern Europe: The Second Wave," by Charles W. Wade, a TFI senior consultant. It also covers non-EU Russia and Ukraine. The report is available for download by TFI Quarterly Forum members.
According to the report, a skilled Romanian worker made about US$5,000 in 2005, compared to more than US$30,000 a year for a worker in Germany, which has the highest labor costs in the EU. Wade concluded: "In response to our interview question, besides the Ukraine, Romania was noted as the second most desirable location for a low-cost manufacturing operation in Eastern Europe."
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