Dirgantara workers protest dismissal decision

The Jakarta Post, Bandung

Thousands of employees of state-owned aerospace company PT Dirgantara Indonesia took to the streets on Wednesday to protest the government's decision to dismiss 6,000 workers.

"Why are we the victims of this mismanagement?" AM Bone, secretary of the Workers Communication Forum (FKK), asked during the demonstration in front of the company's headquarters in Bandung, West Java.

He said the company's management should have implemented serious efficiency measures to try and salvage the company before deciding to fire workers.

"We demand the government provide us with new jobs," he said.

At a shareholders meeting on Tuesday, the government agreed to the dismissals as part of an overall restructuring program to salvage the ailing company from bankruptcy. The company will only retain about 2,673 workers, to be reselected by independent consultants.

Dirgantara, previously known as PT Industri Pesawat Terbang Nusantara, started as a costly pet project of then minister of technology B.J. Habibie. Several years after its establishment in the 1980s, the aircraft maker was on the verge of bankruptcy until the government of then president Soeharto stepped in and bailed out the company.

On July 11 of this year, Dirgantara president Edwin Soedarmo announced that all workers would be laid off as the company's financial condition worsened. However, the decision was postponed by the government following massive protests.

The FKK also filed a lawsuit against the dismissals with the State Administrative Court in Bandung and is awaiting a decision.

"We are waiting for the court's ruling," Bone said.

He added, however, that employees might accept the decision to lay off some of them, but insisted that the recruitment process for the 2,673 workers to be retained must be fair, and that the severance pay must be announced transparently.

The company's management has allocated about US$54 million to finance a human resources restructuring program, including $42 million for severance pay. The money would come from the sale of assets and from the government.

Edwin has said that the retrenchment program and other restructuring measures, including consolidating the company's 28 business units into only four core units, as well as a financial restructuring that would see its main creditor, the Indonesian Bank Restructuring Agency, obtain a 93 percent stake in the company, will hopefully turn Dirgantara around by 2005.

The restructuring program is also crucial in a bid to obtain about $39 million in fresh money from investors for working capital to complete ongoing projects.