BenQ's files for insolvency for German mobile phone unit

Deutsche Presse-Agentur dpa
Published: Friday September 29, 2006

Munich- Taiwanese-owned BenQ Mobile GmbH & Co said Friday it had filed for insolvency for its German mobile phone handset business, paving the way for the closure of the former Siemens AG unit and casting doubt on the future of around 3,000 jobs. The move to shut down the unit, comes just one year after BenQ acquired the loss-making mobile phone operation from Siemens and was accompanied by angry protests from union leaders.

The board of the parent company, BenQ decided Thursday to end investment in its German mobile phone offshoot, BenQ Mobile, which has also recently performed weakly in the intensely competitive global mobile phone market.

Benq Corp shares jumped by about 7 per cent in Taipei Friday following the news that the group had decided to end the funding for its troubled German handset business.

After Siemens effectively paid BenQ to take over its mobile phone operations, the Taiwanese consumer electronics group had aimed to secure at least 10 per cent of the world market, but at the last count this figure was just 3 per cent.

BenQ plans to continue production of its BenQ-Siemens brand mobile phones in Asia, threatening the jobs of 1,400 working in the group's head office in Munich and factories in Germany.

Under last year's deal with Siemens, BenQ said it would guarantee jobs until mid 2006.

© 2006 DPA - Deutsche Presse-Agentur dpa