Garment factories go bankrupt

Garment factories go bankrupt

JAKARTA (JP): Nine garment companies have gone bankrupt within the last three months, according to data from the Jakarta All- Indonesia Worker's Union.

"This is the worst period in our history, showing the bad garment business this year" said Franky Tan over the weekend. Franky is deputy chairman of the garment, textile and leather sector of the union.

Some businessmen and members of workers' union had previously predicted that 1996 would be the worst year for the garment industry due to the current overtime wage system and declining orders, making it uncompetitive in international trade.

"These most unfortunate events have caused the companies' workers to lose their jobs because the factories were forced to dismiss them," Franky said.

He said that the plight of garment workers has been made even worse because many other garment factories are making rationalizations, reducing the number of their workers.

"A healthy business can move its workers to the company's branches or other sectors instead of just firing them," Franky said.

But in some cases, the workers do not want to work in the branches, which are usually located out of town, because the company does provide their families with facilities, such as providing funds for their children's' education.

With the bankruptcy of the nine companies, there are now 171 garment companies left in the city. This number does not include the approximately 2,000 other companies which do not have units of workers' union yet, he said.(03)