Rini Soewandi riding high on Astra

Rini Soewandi riding high on Astra

By Yudha Kartohadiprodjo

JAKARTA (JP): Controversial as she is, Rini Soewandi took the
helm of Astra International (AI) in mid-1998, when the company
was weathering tough times. Indonesia was in the middle of an
economic crisis, while the world's automobile industry was going
through consolidation through megamergers.

Rini's first challenge as CEO was to engineer AI's debt
restructuring process. Not a mundane task, considering AI's debt
of US$1.4 billion.

After months of hard work, AI's restructuring plan was
accepted, spreading a wave of confidence throughout the
Indonesian business community.

Numbers and figures seem to be Rini's strength. Her career in
finance started at Citibank, after a short stint in the U.S
Treasury after she graduated from Wellesley, a women's college in
Massachusetts, which Hillary Clinton also attended.

Rising to the position of vice president of Citibank at the
age of 31, Rini, now 43, took the offer to become Astra
International chief financial Officer in 1990. The company's
portfolio was not unfamiliar to her as she handled it while she
was still working in Citibank.

Now, Rini's next challenge is to make Astra into a prominent
multinational corporation in the region. The company's business,
from its well-known automobile brands to its less-acknowledged
yet profitable agribusiness is still the beacon of Indonesia's
business.

The following is an excerpt of her interview with The Jakarta
Post.

Question: Despite a recent rise in car sales, why did Astra choose to
concentrate its automobile business in the downstream industry?

Answer: We are still very cautious about this, whether the surge is
going to sustain the market. We actually have a bit of a backlog
because we did not anticipate it was going to be that much of an
increase at this time.

Astra itself will concentrate on the retail side of the
automotive business, toward consumer-orientation businesses and
services, which is the part of the automotive industry like
sales, service and spare parts.

Although we still involve ourselves in the manufacturing side,
it will not be as much as it used to be.

We are analyzing how the automotive industry worldwide is
evolving. There is an overcapacity of automobile production
worldwide, especially in Indonesia.

The number of automotive players now has decreased through
mergers, which means a manufacturer has to create higher
efficiency.

To achieve this, a manufacturer's facility has to link up with
other facilities around the world. Because if not, it will be
inefficient.

We realize Astra (on its own) does not have this manufacturing
link and, therefore, it has to really work together with its
partners, because our partners are the ones with the global
network.

Therefore, we will become more of a follower in a sense. Astra
will provide its partners with local expertise, in providing
human resources and other local advise.

At the same time, we will be servicing our partners by
becoming a strong local market distributor.

Q: Is the sale of some Astra shares in Astra Daihatsu Motor to
Daihatsu Motor Corp. a part of your strategy to strengthen
Astra's position in the region?

A: Yes. It is part of the realization of our concept. The
manufacturing facility that we have in Indonesia needs to be used
for the demand of the region. For this we need the support of our
partners.

In the past, we were very adamant in ensuring that we had
majority (share). Now, as long as we can have a regional market
for our products we are willing to go on 50:50 basis or even
less.

Q: You mentioned the automotive industry's worldwide evolution.
How would you place Astra within this change?

A: The way I see it is that Indonesia's automotive policy evolved
around commercial vehicles such as Kijang (Toyota) and Panther
(Isuzu). I think if we want to become competitive, it will be in
that category, not in other sectors like sedans.

Q: Astra took great responsibility in saving Bank Universal. Is
this a legacy the founders of Astra have left?

A: Astra's founders outlined that trust is such a precious and
important commodity that it always has to be fulfilled and
accommodated.

This was one of the most difficult parts for us actually.

In the process of the debt negotiations with our creditors,
they asked, from the beginning, why we stopped paying interest
while we actually have cash, and put part of that money -- $450
billion -- into the bank.

The creditors could not accept this.

Ensuring the survival of the bank was part of maintaining the
trust because Astra will involve itself more on the retail side
of the business.

Q: You mentioned trust, which must be one of the key elements
needed during your negotiation with AI's creditors.

A: To be honest, they just did not trust us at all. (Laugh)

Trust was one of the most important parts of the negotiations
because we had such a good relationship and communications with
our creditors before the crisis.

I think the creditors, in general, look at Indonesia as a real
problem country. Their general reaction was to distrust
everything about Indonesia, with Astra as no exception. It took
about three months before the trust came back.

Q: As a part of your negotiations, you presented a 10-year
projection plan, which obviously depends on Indonesia's
macroeconomy...

A: Which is... arguable... (Laugh)

Q: Exactly. How do you defend this plan?

A: Very difficult and we needed to have many third parties to
present their opinion.

Actually, in the projection, we requested Arthur Anderson
(consult agency) to help and ensure there was an objective
perspective. But the creditors said that was not enough ...

They also felt the need to have another auditor look at the
numbers and we agreed because we had nothing to hide.

Q: Does the fact that AI has no majority shareholders make it
easier in the negotiations?

A: To be honest, not really. It was scary for the management to
realize that we have nothing to fall back on. Having majority
shareholders, in a way, ensures that if something happens we can
always ask for a bailout.

So there was this scary part of realizing that AI's survival
and the life of its 100,000 workers rests solely on our (the
management) shoulders.

On the other hand, it was a challenge.

We are probably the only company in the country which does not
have a majority shareholder but which has an opportunity to prove
that a professionally run company can strive better.

Q: How do you uphold the workers' and management's confidence
and moral after 25,000 workers were laid off?

A: By smiling everyday...

The most difficult part was to keep the confidence at every
level. That Astra will actually weather the crisis.

The fact that they were laid off somehow made many of those
still employed pose the question 'If a year from now Astra goes
bankrupt, what will I get? Astra may not be able to offer me any
severance pay?'.

So this was the most difficult part: communicating and
explaining that we laid off 25,000 of their coworkers to ensure
that the company would survive and that we are committed to the
company.

I think during that time, I am not joking when I say that I
had to make sure I always looked happy (laugh) or confident
(another laugh).

That's why we worked hard to be communicative and transparent
during the debt-restructuring process. We talked to the press a
lot through every stage as a way to communicate to our 100,000
workers, to show that we are making progress.

How do you endure this period?

Pray a lot. And believing that we are doing the right thing
and the good thing for the interest of many people. I believe
that there is always a way, which somehow always works with me.

Q: One of your last duties at Citibank was being in charge of
recruitment?

A: Yes. I felt it was important for me to have this experience
because in the end, how a company is being shaped depends on how
you manage its human resources.

Q: Now that you are in the top position, how would you like to
shape AI's human resources?

A: We are implementing a performance-oriented system, where each
employee will know his or her contribution to the company through
understanding the job description and key performance indicator.

Employees should be professional and have a sense of belonging
to the company, which would actually boost their productivity.

At the last shareholders' meeting, we requested the
shareholders set aside 3 percent of new stocks issue for the
executive level for the next three years.

I hope that in the long run, AI will implement a policy for
every employee to have an opportunity to get a stock option.

If I can achieve that, it will be a personal achievement that
I will cherish for the rest of my life.

Q: It seems that you take the challenge of increasing the
workers' welfare and professionalism as a personal objective...

A: I am a believer of teamwork, which means, that there should
always be a sense of belonging among the employees.

You only can create this kind of environment when the workers
know that we do care for them. It boils down to respecting and
trusting one another as well as fulfilling the commitment.

Q: Most key executives of Indonesian companies have had the
experience of working in a foreign company early in their career...

A: I think large Indonesian businesses, and also most of Asia's,
evolve slower than in West. Most are still family owned and
managed.

Indonesia started quite late in creating a professional
management rhythm. Foreign companies have been evolving for a
long time. Many have been incorporated since the 1800s and grew
professionally in the early 1900s. So they established
professionalism quite some time ago.

So it is good for us to learn things from Western companies to
be implemented in the East.

Q: You were educated in a single-sex college. Do you believe
there are advantages to a single-sex education environment?

A: Some people say no because such an environment is more of a
disadvantage as we were competing only with the same sex, while
in the real world you are competing also with the opposite sex.

Another argument goes that it prepares you better. You know
you have to compete with males as females at that time were
considered a minority in the working environment and have to
strive for their right.

The way Wellesley educates students is through ensuring our
competitiveness, because they want us to realize that when we
leave the place, we will be facing strong competition.

I think this developed more confidence in us. Through the
process, this environment makes us to be better people.

Q: Your father insisted that you learn Javanese while you were
educated abroad...

A: My father, even though we were in the Netherlands and the
U.S., always wanted me to learn how to speak Javanese and to
learn Javanese dancing. I think my father is Indonesian through
and through.

Q: How have the two cultures shaped you?

A: I think I have to say the mixture of Javanese and Western
cultures has helped me become what I am.

I learned to be assertive from the Western culture but also
learned that I have to be polite and respectful toward my elders
from the Javanese culture.

Q: You have been considered as a very successful woman -- or
shall I say person. Do you have any particular failure that you
learned a lot from?

A: A lot. I experienced many failures ...

In the end, the most important thing is that I am always able
to learn from an experience and I continue to have the willpower
and strength to fight even when I am at the lowest level.

I think that really helps me to do many things.