Industrial dispute at aerospace firm settled
Yuli Tri Suwarni, The Jakarta Post, Bandung
The tension at the state-owned aerospace firm PT Dirgantara Indonesia (PT DI) came to an end soon after the company's president director Edwin Soedarmo annulled his decision to lay off all 9,670 employees on Wednesday.
With the decision's annulment, employees will return to work on Monday.
The president director closed and locked the plant on July 11, and decided to lay off all the workers as a result of the chronic financial difficulties that had been plaguing the company for years.
Speaking to the press here on Wednesday, Edwin said that around 3,000 employees would be reassigned to assemble CN-235 passenger planes and to produce spare parts for A-380 aircraft ordered by British Aerospace.
He said PT DI was currently working on two CN-235 planes ordered by the Royal Malaysian Air Force, which were scheduled to be delivered in September, 2004, and March, 2005, respectively.
The company is also working on four CN-235s ordered by Pakistan, which should be delivered by the end of this year and in June 2004.
As for the remaining employees, Edwin said the company had yet to decide on what to do about them. "In the next six months, we will undertake a streamlining program in the company and concentrate on our core business. This will likely lead to a cut in our workforce," he said.
Even if the company does decide to lay off a part of the workforce, it will also face difficulties as it will have to pay massive amounts of money in severance pay.
The decision to lock out the workforce raised tension between the management and the workers, and led to highly public bickering among top government leaders. State Minister for State Enterprises Laksamana Sukardi backed the management decision by saying that the company needed to cut its losses, while Minister of Manpower and Transmigration Jacob Nuwa Wea slammed the decision saying that it violated the prevailing labor law.
The company has been dragged down by debts totaling around Rp 2.5 trillion (US$304 million) owed to the government and the Indonesian Banking Restructuring Agency (BPPPN), and has to spend Rp 35 billion monthly to cover its operating costs, including employee salaries.
Edwin also denied an allegation that he had ordered the cutting off of water and electricity supplies, as well as medical services for the employees.
"It was probably sabotage as I personally never gave any such order. Anyway, there is still manufacturing work going on in the plant," he said.
Meanwhile, employees of PT DI, who have been staging rallies at the factory complex in Bandung for the last four days, halted their action following the decision's annulment.
PT DI Labor Union (FKK) spokesman Arif Minardi said that the rallies had been halted after they received the official announcement on the decision's annulment.
"The rallies were costing the union Rp 4 million a day," he added.
PT Dirgantara Indonesia, formerly known as PT Industri Pesawat Terbang Nurtanio (IPTN), was one of 10 strategic industries under the supervision of former technology and research minister B. J. Habibie in the 1980s. Since the initial investment of Rp 1.6 trillion ($195 million) to establish the company in 1986, it has faced persistent and chronic financial problems, with the government having to step in to cover its operating costs in the early 1990s.
The company's outstanding debts now reach Rp 2.9 trillion. The debts soared after the company recruited a large number of personnel for the development of the N-250 passenger aircraft.
But after the signing of the Letter of Intent (LoI) between the International Monetary Fund and the Indonesian government, PT DI found itself cast adrift and left to stand on its own two feet.