DI workers produce demand for large high severance payments
The Jakarta Post, Bandung/Jakarta
The workers' union of ailing state aircraft manufacturer PT Dirgantara Indonesia (DI) said on Friday it would welcome the government's plan for wholesale dismissal, but only if each laid- off worker received at least Rp 200 million in severance pay.
Union secretary AM Bone said that the amount was about four times that specified by current labor regulations.
"We'll ask the company to continue negotiating. As long as the principle and the process are right, we'll accept it," Bone said.
The remarks could prove to be an indication of further snags in resolving the dispute between the company's management and workers, as, according to DI president Edwin Sudarmo, the government's US$50 million bailout funds just cover the amount required under the current rules.
"If the result (of the negotiations) requires us to pay more than that, we would have to renegotiate on the bailout funds with the government," Edwin said.
On Thursday, a Cabinet meeting decided to press ahead with the troubled company's plans to lay off numerous workers and pledged to provide them severance pay, drawn from the proceeds obtained by the Indonesian Bank Restructuring Agency (IBRA) from the sale of various assets.
The move was made in a bid to end the long standoff between the two opposing parties so that the company could concentrate on its business operations with a more efficient, slimmer organization.
The dispute started in July when the management unilaterally laid off 9,670 employees to try to reduce the company's financial burden amid continued heavy losses. The move sparked anger and protest from the workers, who had not previously been consulted over the decision.
To end the standoff, which would have eventually created further losses for the company, the government, as majority shareholder, stepped in.
Formerly (and famously) known as PT Industri Pesawat Terbang Indonesia (IPTN), DI used to be one of the 10 strategic industries under the supervision of former technology minister B.J. Habibie in the 1980s.
It received an initial capital injection of Rp 1.6 trillion when it was established in 1986; however, in what analysts attributed to its inefficiency, the company in early 1990 faced severe financial problems, which forced the state to cover its operational costs.
It then plunged deeper into trouble when the economic crisis struck, which was followed by the fall of president Soeharto in 1998. He had previously regarded the technology sector as a matter of national pride.
The aircraft company produced what was supposed to be the country's own aircraft, the CN-235 and N-250. Currently, the company is working on several orders to build CN-235 planes for Malaysia's Royal Air Force and for Pakistan.
Elsewhere, Edwin reiterated that from the company's point of view, it could only recruit a maximum of 3,400 workers, meaning that it would still have to dismiss the remaining 6,600 workers.
Commenting on the union's demand, State Minister for State Enterprises Laksamana Sukardi said the government had left that decision to Minister of Manpower and Transmigration Jacob Nuwa Wea.