IPTN begins 1st phase of cutting workforce

IPTN begins 1st phase of cutting workforce

By M.M.I. Ahyani

BANDUNG (JP): Financially strapped PT IPTN, the state-owned
aircraft manufacturer, has offered its aging and low-skilled
employees lucrative cash incentives to retire early in its bid to
streamline its workforce from 15,750 to 10,500 by 2001.

In the first phase, the early retirement scheme is being
restricted to those with a primary school education, those with a
junior high school education aged over 45 years and employees of
any educational background who are 53 years or older.

The next phase, for workers with a senior high school
education, is expected to be announced in March.

The early retirement offer has become the main topic of
discussion among workers at the plant, which due to depleting
orders scaled down its operation to four days a week five months
ago.

One estimate put total individual severance pay at between Rp
19 million and Rp 50 million, depending on the grade and length
of service.

"Obviously, management hopes that the severance pay will be
used as start-up capital, or at least invested in a bank deposit
to allow them decent earnings," IPTN public relations chief M.
Tjahjojo Satoto told reporters on Monday.

Satoto said many employees had asked for the application forms
to take up the offer.

He said those who qualified for the scheme included 411
employees with primary school education, 233 employees above 45
years old with junior high school education and another 115
employees who are over 53 years old.

"Obviously, not all of them will want to take advantage of the
offer. And not everyone who applies will be accepted," he said.

One employee who is looking forward to the next phase is 52-
year-old Cece Hidayat from the fabrication section.

A graduate of a technical senior high school and with 17 years
dedication to IPTN, Cece said the cash incentives were very
tempting.

"Using the formula, I stand to receive Rp 30 million, and
another Rp 4 million from Jamsostek if I apply," he said,
referring the state-run social security insurance company.

That sum, if put in a time deposit, would earn interest that
would cover some of his family's expenses. The remaining expenses
would have to be covered by whatever job he might get after
retiring from IPTN.

Cece, a father of five, earns Rp 650,000 a month, comprising
Rp 355,000 in basic salary, Rp 155,000 in performance-related
incentives and another Rp 140,000 in allowances.

Satoto declined to give estimates of the total cost to IPTN in
terms of severance pay in cutting its workforce.

"Where is the money coming from? Partly from retained earnings
and partly from the proceeds of sales of assets no longer
considered productive or effective," he said.

He did not rule out, when asked by reporters, that among
assets to be disposed of would be the Gulfstream G-4 corporate
plane which Habibie often used when he was the company's
president.

"It's possible. I don't really know," he said.

IPTN, the brainchild of Habibie who served as corporate
president until March, has been deprived of further government
financial support since last year at the behest of the
International Monetary Fund (IMF).

Existing planes

Since the government stopped funding IPTN, the company has had
to concentrate its work on its two existing planes, the CN-235
and the N-250. The company will complete the preliminary design
of its first jet, the N-2130 project, but what happens after that
is anybody's guess, Satoto said.

PT DSTP, the company established in 1996 by then president
Soeharto to raise the $2 billion funds from the public needed to
develop the N-2130, stopped supporting the jet program last year.

Currently, IPTN is working to complete 15 CN-235s: six for the
Malaysian armed forces, six for South Korea, two for Thailand and
one for Brunei.

The two prototypes of the N-250, the first plane wholly
designed by Indonesians, are currently undergoing certification
process from the Indonesian Certification and Airworthiness
Office, the Joint Airworthiness Authority in Europe and the
United States' Federal Aviation Authority.

Satoto also confirmed rumors of impending changes at IPTN's
management as part of the ongoing corporate streamlining. "We'll
probably cut the number of directors from 10 to five," he said.

Five names have been mentioned as candidates to replace IPTN
president Hari Laksono. They are Cacuk Sudarijanto (a director
general at the Ministry of Cooperatives and Small Enterprises),
Setyanto P. Sentosa (former PT Telkom president), Arsyad Ismael
(PT Inti president) and Bambang Wahyudi (technical director of PT
Garuda Indonesia).