IPTN agrees to award pay rise to most workers

JAKARTA (JP): PT IPTN, the state-owned aircraft manufacturer, agreed yesterday to award a Rp 150,000 pay increase across the board for all its workers whose net monthly earnings were less than Rp 700,000 (US$200), Antara reported.

The increase, which is effective with this month's payroll, comes after a rare three-day stoppage by thousands of IPTN workers at its main plant in Bandung, West Java, last week.

The workers had asked for a 300 percent increase and a series of other demands to improve their welfare. Many workers, including university graduates with long service, said their monthly take-home pay was currently around Rp 500,000.

IPTN President B.J. Habibie, who is also state minister of research and technology, announced the pay increase in his office in Jakarta yesterday.

The decision came after a dialog with the Employees Communication Forum, established this week to represent the workers in negotiations with management. The forum is headed by Ilham Habibie, a son of B.J. Habibie and staff member of the company.

Habibie said the company had acquiesced to some of the other demands, such as incentive bonuses, health benefits and a pension fund. Antara gave no details of the agreement.

Habibie conceded that a monthly income of Rp 500,000 was hardly adequate to support workers living in Bandung. The increase was also justifiable in that it compensated for inflation and the weaker rupiah, he said.

Employees whose earnings exceed Rp 700,000 would have to wait, he said. "I told them to be patient. We're in a transitional period, and you guys have had the benefit of Rp 700,000 for some time."

IPTN will now have to fork out an additional Rp 3 billion ($860,000) for its monthly payroll, which was Rp 25 billion for its 16,000-strong workforce.

"You may wonder where the money is coming from.

"I'm selling my planes in dollars. So I'm gaining from the strong dollar vis-a-vis rupiah," Habibie said.

IPTN had not otherwise profited from the currency crisis, though it had gained an unexpected windfall, he said. "It's legitimate money," he added.

But he said that IPTN did not have the money to meet the 300 percent pay increase sought by employees.

IPTN is currently in the process of restructuring the company and hopes to cut down its workforce by about 4,000, chiefly through voluntary early retirement or by reassigning staff to other strategic industries also overseen by Habibie.

Habibie, who chairs the Strategic Industries Supervisory Agency, said he was considering awarding similar pay hikes in the other companies under his charge.

Habibie visited the IPTN plant last Friday to talk directly with the striking workers. He immediately agreed to one of the 14 demands presented by workers: removing the ceiling on medical and hospital claims.

The workers returned to work on Monday after receiving assurances that Habibie would look into their demands, and after the appointment of their representatives to the newly established forum.

There was no immediate report on IPTN workers' response to the decision to grant them a Rp 150,000 increase yesterday.

Habibie stressed that the employees' forum was not a union.

The forum, to which all employees belong, and the company cooperatives were the means to promote the welfare of IPTN workers, and not through the formation of a union, he said.

Habibie praised his employees for maintaining peace and order as they staged their protest, and for the way the problem had been resolved peacefully with management. (emb)