State aircraft company to cut jobs by 40 percent

JAKARTA (JP): State-owned aircraft manufacturer PT IPTN will cut its jobs by 40 percent to 10,000 from the current 16,000 personnel as part of its restructuring plan, company president B.J. Habibie said.

Habibie, also state minister of research and technology, said over the weekend that the aircraft company would focus on its core business; designing and producing airplanes.

"IPTN will only focus on aircraft," Antara quoted Habibie as saying after signing a technology cooperation agreement with visiting Minister of Economy and Finance of Saarland, Germany Christiane Krajewski.

He said IPTN would, for example, hire another firm to handle security and service instead of maintaining its own security and service division.

"The restructuring plan is not bad and this doesn't mean that IPTN has failed," he said.

General Manager Hari Laksono said at the company's headquarters in Bandung that no one would be laid off in the restructuring program.

"We will, instead, replace the personnel of the affected divisions," he told The Jakarta Post.

He said a number of IPTN's divisions would be separated as independent companies such as those involved in packaging, polyclinic, hotel, transportation, real estate, printing and publishing activities.

He said that IPTN had selected AT Kearny, a management consultant from the U.S., as the advisor in the restructuring plan.

He said that AT Kearny outbid three rivals, Mc Kenzie, Anderson and Booz Allen to obtain the consultancy job.

The Bandung-based aircraft manufacturer set up in 1976 was called Industri Pesawat Terbang Nurtanio. Ten years later Habibie changed the name to Industri Pesawat Terbang Nusantara.

The company makes C-212 and CN-235 fixed-wing aircraft in cooperation with Casa of Spain and NBO-105, NSA-330 Puma, NAS-332 Super Puma and Bell 412 helicopters.

In 1987, the company was assigned to develop its own aircraft, the N-250, which carried out its maiden flight in 1995. The N- 250, equipped with fly-by-wire electronics, is a turboprop commuter airplane with a top speed of 300 nautical miles per hour.

Giri Suseno, a top executive of the Strategic Industry Management Board chaired by B.J. Habibie, said earlier this year that IPTN lost Rp 185.55 billion (US77.2 million) in 1995.

At present, IPTN has several subsidiaries including PT IPTN North America, an aircraft assembler in Alabama, the United States, PT Batam Aircraft Maintenance in Batam, Riau, PT IPTN Europe ASL and IPTN's marketing arm in Lemwerder, Germany.

The company also has a 51.1 percent stake in PT Nusantara System International, a software and system company, a 10 percent stake in PT General Electric Indonesia and a 40.1 percent in PT General Electric Nusantara Turbine Services.

Laksono said that three private companies, including the Humpuss group, had offered to buy into Universal Maintenance Center, IPTN's maintenance service.

IPTN is currently developing N-2130, an Indonesian-designed passenger jet which will be able to carry 130 passengers. The first aircraft product is scheduled for 2004.

The designing, engineering and construction of the N-2130 prototype will take eight years and cost at least US$2 billion. The aircraft will be able to fly at a speed of 232 kilometers (125 knots) per hour with a maximum cruising altitude of 11,890 meters (39,000 feet).

President Soeharto has set up a company, PT DSTP, assigned to finance the N-2130 project led by Habibie's eldest son Ilham Akbar Habibie.

"So far there have been Rp 400 billion (US$166.3 million) raised from DSTP's share offering," Ilham said in Bandung over the weekend.

He said the world needed some 3,600 jets like N-2130 aircraft. "We estimate to grab 25 percent of the share market. We will break even after selling 300 jets." (ahy/icn)