Mon, 14 Jul 2003

PT DI's suspension of workers illegal: Minister

Yuli Tri Suwarni and Ridwan Max Sijabat, The Jakarta Post, Jakarta/Bandung

Despite chronic financial problems, state-owned aircraft manufacturing company PT Dirgantara Indonesia's unilateral decision to lay off a total of 9,670 employees with pay to salvage the company is a wrong decision and against the law, according to the manpower minister and several company directors.

The company's workers rejected the management's unilateral action, saying the financial problems were not reason enough to take the decision without their consent.

Chairman of the PT DI's Workers Union (FKK) Arif Minardi told The Jakarta Post in Bandung on Sunday that FKK has sent a letter to relevant authorities to protest the unilateral decision.

"We have a clear picture of the company's current financial condition. Its operation could continue without the layoff, but maximum efficiency is required," he said.

As of July 11, the plant located on Jl. Padjadjaran in Bandung has been tightly guarded by personnel of the Air Force's Elite Forces (Paskhas). All employees have been asked to go home and no employees have so far been allowed to come in.

"This is not a closing down, layoff, or lockout, but a suspension that we have to undertake for the next six months until we have adequate job opportunities," PT DI president Edwin Soedarmo, accompanied by director for commerce Budi Wuraskito, said here over the weekend.

According to Edwin, the company has serious financial problems since it spends Rp 35 billion each month in the salaries, transportation, and the meal allowances of its workers as well as for water, electricity and telephone charges. The suspension is expected to reduce costs by 20 percent.

PT Dirgantara's general affairs director Budi Setiawan and technology affairs director Sudarma said the decision was invalid and illegal.

"The decision is invalid because three of the five members of the board of directors were against the decision," Budi said, referring to the company's internal rules and corporate law.

PT DI is currently working on two CN-235 planes ordered by Malaysia's Royal Air Force which are scheduled to be delivered in September 2004 and March 2005 respectively.

The company is also working on four CN 235 ordered by Pakistan which will be delivered by the end of 2003 and June 2004. It is also manufacturing the wings for a Boeing A 380.

Manpower and Transmigration Minister Jacob Nuwa Wea regretted the company's unilateral decision, saying that in line with Law No. 13/2003 on labor protection, the management should have discussed the financial problem bipartitely before the decision was made.

"The company should have consulted the local manpower and transmigration office and exhausted all other options before taking the decision," he said. He admitted he had not received a report on the massive layoff and said his team would leave for Bandung shortly to handle the labor dispute.

PT Dirgantara Indonesia, formerly known as PT Industri Pesawat Terbang Nurtanio (IPTN), was one of 10 strategic industries under the supervision of former technology and research minister B. J. Habibie in the 1980s. After an initial capital of Rp 1.6 trillion (US$195 million) was injected to establish the company in 1986, it faced chronic financial problems, such that its operational costs were borne by the state budget early in the 1990s.

The company was facing critical financial problem in the 1990s when Habibie known as the "golden child" of former president Soeharto wanted to fulfill his dream of producing passenger airplanes such as CN-235s and N-250s and assembling Puma and Bolco helicopters.

Habibie succeeded in including the company's operational costs in the state budget and even took Rp 400 billion from reforestation funds to help bail out the company.

To help ease the difficulties, Habibie ensured that state- owned airline companies were obliged to buy CN-235s. Other aircraft were given to Thailand and Malaysia in 1995 under countertrade agreements.

Habibie said in a long-distance interview with SCTV TV station on Sunday that the aircraft industry was still needed because its products were still saleable in Europe, North America, Brazil and Asia.

He said he was ready to return to the company to make it viable "but I ask to be given 5 percent of the company stakes that I cannot sell, to provide legitimacy for my position in the company".

He agreed to the idea of selling the company to domestic or foreign buyers to solve the financial problem and pay company debts but denied that his two sons were eying the company.