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Trade Union News from Finland
Financial crisis 2007-2010:
Major Finnish multinationals continue to expand abroad

Helsinki (26.06.2013 - Timo-Erkki Heino) "Finnish multinational corporations are export companies which carry out a major part of their activities in Finland." - This is the perception many Finns have of Finnish multinationals. The perception is outdated: in the case of eight major multinational manufacturing companies only 25 per cent of their personnel were in Finland in 2010 compared to 47 per cent in 2000, report Pekka Sauramo and Ritva Oesch in their study* recently published by the Labour Institute for Economic Research.

However, this outdated view still prevails in Finnish economic policy discussion - and practices - with conservative Government ministers demanding moderate or preferably zero-line wage increases in order for these multinational corporations to increase or maintain their employment levels in Finland.

From the early 1990's onwards the business strategy of Finnish multinationals has been to move their production to low wage countries or closer to the expanding markets outside Finland. During the years of the global financial crisis 2007 - 2010 the multinationals continued to implement this strategy, conclude Sauramo and Oesch.

From 2007 to 2010 the 30 biggest Finnish multinational corporations reduced their personnel in Finland by approximately 32 500 from 215 000 down to 182 500. At the same time these companies increased their personnel abroad by approximately 8 000 from 298 000 to 306 000. During the financial crisis the multinationals' jobs cull in Finland hit the Finnish economy and employment hard.

The financial crisis was felt in differing ways in various regions of the
world. Accordingly, the Finnish multinationals reduced their labour forces by between 7 and 25 per cent in Sweden, Germany, the US and Estonia. In China, Russia and India the companies increased their manpower by between 9 and 70 per cent. In Russia Finnish multinationals expanded in the retail and wholesale sectors, in China and India in the metal and electronics industries.

"The fall off in market share of a multinational's Finnish subsidiary has nothing necessarily to do with wage competitiveness in Finland but might be the result of an increase in the market share of the multinational's subsidiary abroad", considers Sauramo.

*Pekka Sauramo and Ritva Oesch: Globaali talouskriisi ja suomalaiset monikansalliset yritykset [Global financial crisis and Finnish multinational corporations], Labour Institute for Economic Research, Research Report no. 25, 2013

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