IPTN agrees to award pay rise to most workers

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)