Taiwanese supplier blasts Nokia over cancelled order

A Taiwanese maker of networking supplies took out a front page advertisement in The Wall Street Journal’s Asia and Europe editions on Monday, blasting Nokia for cancelling an order it claims will put it out of business.

“UNFAIR! UNFAIR! UNFAIR! Nokia’s order cancellation = Bankruptcy to YCL,” reads the front page advertisement placed in the Wall Street Journal by Taiwan’s YCL Electronics. The company also placed further details on its Web site, including e-mail correspondence purportedly between YCL and Nokia executives: http://www.ycl.com.tw/ycl_index.jsp

The ads can also be found on the Europe and Asia main pages of The Wall Street Journal Online: http://online.wsj.com/home/europe?mod=0_0003.

According to the information YCL placed on its Web site, the Taiwanese company owns up to the fact it signed an agreement with Nokia which stated that “Nokia may cancel the order without any liability 2 weeks prior to the delivery date” but then later complains that the agreement is unfair.

In the first series of e-mails, an executive at YCL, Dennis Hsieh laments that he will likely lose his job because he signed an unfair agreement with Nokia on his own, without consulting the president of YCL. He then complains the agreement puts all the business risk on YCL, which has to purchase the raw materials for the devices it is making for Nokia far in advance, leaving YCL vulnerable to bankruptcy if Nokia opts to renege on the deal.

The reply Hsieh gets from a Nokia executive (also included in the correspondence posted on the Web site, complete with contact details), is that Nokia is trying to find a different customer for YCL, and asks if YCL could tell Nokia its rock bottom price, according to the documents on YCL’s Web site.

The next series of emails comes from a new YCL executive.

“Mr. Dennis [Hsieh] resigned because he signed a very UNFAIR agreement (No.341235) with Nokia,” wrote Andy Lu, vice president of sales at YCL, in an e-mail posted on YCL’s Web site. He too asks Nokia to reconsider the situation and threatens to go to the press with YCL’s case.

Nokia could not be reached for comment despite several attempts to contact the company in Asia and Europe.

A representative for The Wall Street Journal in Hong Kong said her company spent at least 2 weeks ensuring it could legally place the advertisement on its pages.

YCL “have all the supporting documents, so we were able to run the ad,” said Rebecca Tjouw, from The Wall Street Journal’s advertising department. The type of advertisement YCL placed on its front page normally costs around $40,000, she said.