200 local workers to assemble Timor at S. Korean plant
JAKARTA (JP): PT Udatin said here yesterday that it will soon send 200 workers to South Korea, where they will work with Kia Motors Corp. to produce Indonesia's national cars.
The company's general director, Sodiq, said in a statement that the company will send 100 workers during the first stage.
"As requested by PT Timor Putra Nasional, we have prepared 100 workers to be sent to Kia Motors' manufacturing plant in South Korea to join other Indonesian workers who arrived there earlier," he said.
Sodiq, however, did not say if those already in South Korea are from Timor Putra or other companies.
Udatin, a subsidiary of the Udatinda Group, is the assembly division of Timor Putra, which in February received an exclusive right to develop the national car.
Timor Putra, controlled by President Soeharto's youngest son, Hutomo Mandala Putra, is developing a sedan with an Indonesian brand name, Timor, in cooperation with Kia. It was granted tariff and luxury tax breaks for three years to develop the car.
It plans to market its duty- and tax-free cars in September. To realize its plans, it is in the process of importing 4,000 Timor cars per month from Kia Motors starting this month.
As reported by Bisnis Indonesia yesterday, Timor Putra has opened letters of credit to import 4,000 completely-assembled Timor cars from South Korea.
Initially, the company wanted to import them in semi-assembled conditions and then assemble them at assembling facilities owned by other auto firms in Indonesia.
Facing difficulties in using local assembling plants, Timor Putra changed its initial plans and decided to do the assembling in South Korea.
The government supported Timor Putra's plans through a presidential decree dated June 4, which stipulated that cars manufactured overseas by Indonesian workers with the same amount of local contents as stipulated in the national car program will be granted the same privileges as the national car.
Under the national car program, Timor car is required to have local components of 20 percent by the end of the first year of operations, 40 percent by the end of the second year and 60 percent by the end of the third year.
20 percent
Minister of Industry and Trade Tunky Ariwibowo said last week that Timor cars, which will be manufactured in South Korea by Indonesian workers, will contain 20 percent Indonesian components -- valued at some US$100 million -- which will be shipped from Indonesia.
Kia Motors said last month that it was ready to train 1,000 Indonesian technicians to be employed by Timor Putra and its affiliates in Indonesia, including Udatin.
Sodiq said Udatin has prepared another 100 workers to be sent to South Korea. He said those being trained in South Korea will become the main personnel in its assembling plant in Surabaya.
"Besides assembling Timor cars, they will also be trained to get the skills needed to operate Udatin's plant which will assemble Timor cars," Sodiq said.
A South Korean diplomat here, however, noted that his country's employment regulations allow large companies, including car-assembling firms, to train foreign laborers only.
Timor Putra's messy plans to produce the national car and the government's "controversial" rulings to support it have drawn criticism.
Economist Kwik Kian Gie, for instance, criticized the contradictory and unclear rulings governing the national car program.
In the beginning, the government -- through Presidential Instruction No. 2/1996 -- stipulated that the company which develops the national car must be located in Indonesia and wholly owned by Indonesians.
Later, however, the government said -- through Presidential Decree No. 42/1996 -- that the national cars can be produced abroad by Indonesian workers provided that the cars meet the local content requirements.
"How to interpret the 20 percent local content for a car produced in South Korea... What does it mean by workers? Are they unskilled workers or engineers?" Kwik wrote in the Kompas daily yesterday. (rid)