Mass axing faces Texmaco

Mass axing faces Texmaco

Ridwan Max Sijabat, The Jakarta Post/Jakarta

More than 60,000 workers of the Texmaco Group may lose their jobs
following the government's refusal to reschedule its huge debts.

The Central Committee for the Settlement of Labor Disputes
(P4P) revealed on Friday that about 4,000 workers of three
companies under the group had demanded that the P4P order the
Texmaco management to dismiss them and provide severance pay and
other compensation according to labor regulations.

Texmaco, however, claimed to have no funds to meet the demand.

"In our plenary session last week, all committee members were
of the opinion that the Texmaco management needed to dismiss the
4,000 workers, but Texmaco president director Marimutu Sinivasan
said the company faced financial problems complying with the
standard dismissal requirements," P4P chairman Muda Alexander
Sinaga told The Jakarta Post.

The workers concerned are employed by PT Texmaco Perkasa
Engineering and PT Bridge Geboard Perkasa Engineering, both in
Krawang, West Java, and a West Sumatra Texmaco company.

Sinivasan told the P4P hearing that Texmaco could not afford
to pay severance since the company's funds in Bank Central Asia
(BCA) had been frozen by the government, Sinaga said.

Sinivasan also said the mass dismissal of Texmaco Group's
remaining 54,000 workers would be inevitable, since all companies
belonging to the group were in a critical condition because of
the holding company's financial problems.

Sinivasan was not available for comment, while Texmaco
spokesman Yani Rahmadi declined to provide detailed information
on the dismissal.

Meanwhile, Minister of Manpower and Transmigration Jacob Nuwa
Wea asserted that Sinivasan and Texmaco Group had to provide
severance payment for all dismissed workers and that the
government had no obligation to help the ailing holding company.

"Sinivasan should be responsible for severance pay if P4P
orders Texmaco to dismiss all its workers. He must comply with
the Labor Law and respect the workers' rights, regardless of how
he obtains the funds," he told the Post.

Nuwa Wea said he had been monitoring Texmaco's labor and
financial problems closely, and that Texmaco had Rp 26 trillion
in defaulted loans to a number of local banks and US$1.8 billion
in foreign debt.

He also said the government had offered Texmaco assets to
local and foreign investors several times, but none were
interested in acquiring them.

"We have decided not to help Texmaco, because it has extremely
large debts. Texmaco's BCA account has been frozen as collateral
for its debts, because its assets are not saleable and, according
to the government's assessment, they value far below the
company's debts," Nuwa Wea said.

Sinaga expressed concerns about the workers' uncertain future
and potential social problems, as the government had no will to
help Texmaco.

Indonesia's unemployment stands at 9.6 million and 40 million
are underemployed.

"The future of Texmaco workers will be the first labor issue
the next government will have to address," Sinaga said.