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Trade Union News from Finland
Production is returned back to Finland from Asia

Helsinki (13.03.2013 – Heikki Jokinen) Finland is producing bicycles again. The traditional bicycle factory Helkama Velox moved the production line of its Jopo bicycles back from Taiwan to Finland in 2010. Since then the sale of Jopo bikes has doubled.

About 24,000 bicycles will be manufactured this year, which amounts to eight per cent of total annual bicycle sales in Finland. Many components are still produced abroad, but more than 50 per cent is Finnish work. The original Jopo first made its appearance in 1965 and continued in production until 1974. With the retro boom in vogue Helkama began to make it again in 2002 and moved production to Taiwan three years later.

The return of the Jopo factory from Taiwan to the small Finnish coastal town of Hanko is one part of the emerging reshoring, the return of industrial production back to Europe and the USA. The reasons behind this are usually diminished salary differences between countries like Finland and China, greater flexibility and the need to be closer to customers.

According to the International Labour Organisation, real wages in Asia between 2000 and 2008 rose by 7.1-7.8 per cent a year. Pay and benefits for the average Chinese factory worker rose by 19 per cent a year between 2005 and 2010. And the growing use of robots in factories also makes the difference in salaries less important.

The employment effect is not so considerable, Helkama Velox CEO Jari Elamo told Yle news. Helkama factory in Hanko employs 38 people and reshoring Jopo back there only added a few more jobs.

Elamo however, sees major benefits with reshoring. In Taiwan Jopo was made in a big factory together with other bicycles on the same assembly line. This made it difficult to react to sudden changes like the new colour of the season.

”In Taiwan we had to know the colours five months in advance and that is a long time in this business”, Elamo informed Yle. In Hanko the change over to a new colour only takes a matter of hours should another colour prove to be popular in a new season.

At the Helkama Velox factory in Hanko one worker is putting together the whole bicycle. He or she stamps the guarantee card and signs it. In Asian factories bicycles are made in long assembly lines.

Another company to reshore production is the Led light producer Valtavalo, which moved back from China to Finland in late 2012.  They were able to find a suitable location in Kajaani, in the premises where UPM produced paper until 2008.

Markku Laatikainen, Valtavalo's CEO, told Yle news that the most important reasons for relocating to Finland were to ensure smooth production and reliability. To have production in Finland is also important for the company image, he says.

Reshoring to Finland is still a minor phenomenon in comparison to moving production out of the country. Many production lines have vanished completely. The last radio set was made in Finland in the 1990's, TV set 2005, electronic stove 2012, computer 2000 and even the last mobile phone in 2012. The production of matches ceased in 1995 and cigarettes in 2004.