Finland Prime Minister Jyrki Katainen says the government will not buy shares of Nokia to prop up the ailing national institution.
In Finland, Nokia is apparently not too big to fail.
Finland’s prime minister, Jyrki Katainen, says the government won’t prop up the ailing mobile phone maker by buying its shares, Reuters reports.
Nokia, a national institution in Finland that started out as a paper pulp mill nearly 150 years ago, is in a tailspin as rival smartphone makers gobble up market share. A $270 billion global powerhouse at its height in 2000, the company is now worth about $9 billion. Moody’s last week downgraded Nokia’s credit rating to junk status.
Katainen made his comments in the town of Salo, home to a Nokia factory the company said last week it was shutting down as part of a cost-cutting plan that also slashes 10,000 jobs.
At the turn of this century, Nokia alone contributed about one out of every 25 markkas to Finland’s economy and accounted for more than a quarter of its exports. Back then, Nokia made news when a company director got a nearly $104,000 speeding ticket thanks to the country’s system of issuing fines in proportion to income.
Nokia’s share of the Finnish economy has since plunged along with the company’s fortunes.
Ironically, Reuters says other struggling Finnish companies with shallower roots in the country’s history are getting government support as Finland tries to avoid getting sucked into Europe’s economic quagmire.
“This is not our business. We are developing Finland into a country where companies can do well, but this is not the way of support along which the government will go,” Katainen tells the news agency.
Maybe he was just chapped that Nokia’s Windows-based Lumia smartphones won’t run the full version of the Windows Phone 8 operating system just unveiled by Microsoft.
Nokia’s stock slumped 1.5% Wednesday, closing at $2.50 per share.