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).