Govt decides to dismiss DI workers
Febiola Desy Unidjaja, The Jakarta Post, Jakarta
The government finally decided on Thursday to proceed with a plan to dismiss the employees of troubled state-owned aircraft- maker PT Dirgantara Indonesia (DI), despite large-scale protests from workers.
The decision was taken at a Cabinet meeting.
"The meeting decided ... to maintain the dismissal plan," Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti said after the meeting.
He said there would be severance pay for the employees, but his office had yet to decide on the amount.
He said that the compensation funds would be taken from cash obtained by the Indonesian Bank Restructuring Agency (IBRA) from the sale of various assets.
Dorodjatun added that the number of workers to be dismissed had yet to be decided. That decision would be made by Minister of Manpower and Transmigration Jacob Nuwa Wea.
In July, the management of DI decided to lay off 9,670 employees as the company had suffered continuing financial difficulties. The unilateral decision sparked protests as employees claimed they had not been consulted before the decision was implemented.
The government then intervened in the case.
Formerly known as PT Industri Pesawat Terbang Indonesia (IPTN), DI was one of the 10 strategic industries under the supervision of former technology minister B.J. Habibie in the 1980s.
The Bandung-based company plunged into financial crisis after the fall of president Soeharto in 1998; he had regarded the technology sector as a matter of national pride.
DI received an initial capital injection of Rp 1.6 trillion when it was established in 1986. It faced such severe financial problems that its operational costs were borne by the state in the early 1990s.
The post-Habibie administrations considered the company was unhealthy and a financial burden on the state.
The aircraft company produced what was supposed to be the country's own aircraft, the CN-235 and N-250.
In the wake of the layoff decision, the company was working on several orders to build CN-235 planes for Malaysia's Royal Air Force and for Pakistan.
Meanwhile, IBRA chairman Syafruddin Temenggung said that the Cabinet decision to use the agency's money for the severance pay of DI employees would reduce its contribution to the state budget.
IBRA is targeted to raise around Rp 26 trillion in cash this year to help finance the state budget deficit.
Syafruddin said that in return for IBRA money, DI would have to surrender its core assets to the agency.