No massive job cuts for BCA: StanChart<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Britain's Standard Chartered Bank Plc (StanChart) said on
\nTuesday it had no plans for massive job cuts as it rushed to
\nassuage thousands of Bank Central Asia (BCA) employees protesting
\nthe sale of the bank to a foreign consortium, who they fear may
\nstreamline operations and cut jobs.<\/p>\n
Monday's mass demonstration by BCA employees has already
\nforced the government to further delay the announcement of the
\nwinning bid, which was scheduled to be done on Tuesday.<\/p>\n
But StanChart chief executive in Indonesia, Ray Ferguson was
\nunfazed by the delay, saying StanChart remained committed to its
\nbid.<\/p>\n
\"We fully understand the attachment that Indonesians and BCA
\nemployees have to BCA,\" Ferguson said in a press statement.<\/p>\n
StanChart's only other competitor, the U.S. investment firm
\nFarallon Capital Management could not be reached for comment.<\/p>\n
On Monday thousands of BCA employees took to the streets
\nin protest against plans to sell the bank to foreign investors.
\nSome of them said there were rumors being spread of job losses
\nand lower benefits.<\/p>\n
\"There will be no massive job cuts and no changes to employee
\nbenefits and pay,\" Ray said adding that there were also no plans
\nfor branch closures, fundamental changes to management structure,
\nnor integration of BCA into StanChart.<\/p>\n
\"The BCA brand name and identity will be maintained,\" he said.<\/p>\n
Farallon, in an earlier press statement cited similar
\npromises, saying there would be no layoffs within the first two
\nyears.<\/p>\n
But with the delay it remains to be seen whether the
\ngovernment can keep its own promise to announce a winner this
\nweek.<\/p>\n
State Minister for State Enterprises Laksamana Sukardi said he
\nhad received the last assessment results on the two final
\nbidders.<\/p>\n
\"But in the short term we will assess the latest development
\nlike these labor protests which we have to watch out for,\" he
\ntold reporters.<\/p>\n
Monday's mass protests again highlights the painstaking
\nprocesses the government must endure to prove to investors that
\nit is committed to privatization.<\/p>\n
Much is at stake as investors and international lenders will
\ndetermine their next moves in Indonesia, or lack thereof, only
\nafter the BCA deal is done.<\/p>\n
Founded by the Salim Group, BCA is the country's largest
\nretail bank, which the government took over after bailing it out
\nfrom the impact of the 1997 financial crisis.<\/p>\n
Some US$5 billion was spent on recapitalizing the bank, and it
\nstill costs another Rp 7 trillion (about $700 million) a year to
\nkeep BCA, with its thousands of employees, afloat.<\/p>\n
Despite the huge public burden to keep it afloat, BCA
\nemployees demand the government not sell the bank, especially, it
\nseems, to a foreign consortium.<\/p>\n
However, their plight has received backing from at least one
\ninfluential voice within the government.<\/p>\n
State Minister for National Development Planning Kwik Kian Gie
\nalso opposes the divestment, but for reasons other than job
\nlosses.<\/p>\n
Kwik is concerned with the Rp 7 trillion in taxpayers' money
\nBCA would still receive while owned by foreign investors.<\/p>\n
That money is part of approximately Rp 60 trillion the
\ngovernment spends each year on banks that it bailed out with
\nrecapitalization bonds.<\/p>\n
As yet, the government has no immediate solution to reclaim
\nthe bonds from other recapitalized banks before divesting them.<\/p>\n
On the currency market, the latest snag appears to have had
\nlittle impact as players have become desensitized to problems
\nsurrounding BCA.<\/p>\n
The rupiah weakened slightly to 9,970 against the U.S. dollar
\nfrom 9,960 on Monday.<\/p>\n
Stock traders, however, dumped their BCA shares on news of a
\ndelay, prompting the main index to lose 4.6 points to end Tuesday
\ntrading at 469.36.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/no-massive-job-cuts-for-bca-stanchart-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}