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JAKARTA - The government has decided to press ahead with its plan for massive lay-offs at ailing state aircraft maker Dirgantara Indonesia despite angry protests by employees of the virtually bankrupt company. Coordinating Minister for Economic Affairs Dorodjatun Kuntjoro-Jakti said the decision was reached at a limited cabinet meeting on Thursday.
“The meeting has decided, in the framework of business repositioning and to boost the competitiveness of the company, that the lay-offs will be maintained,” he was quoted as saying by Agence France-Presse. Dorodjatun said severance pay for the workers would be taken from funds of the Indonesian Bank Restructuring Agency (IBRA). He claimed the number of job-cuts was yet to be determined and would be decided on by Manpower and Transmigration Minister Jacob Nuwa Wea.
In July, Dirgantara suspended 9,647 of its more than 12,000 employees and later laid off 3,900 workers. Under the government’s plan to keep the hugely indebted company operating at a smaller scale, at least 6,000 workers are expected to be permanently dismissed. IBRA chairman Syafruddin Temenggung, who was present at Thursday’s cabinet meeting, said the agency would provide severance pay for the workers in return for assets and shares owned by Dirgantara’s subsidiaries.
Indonesia’s troubled national aircraft industry was founded 27 years ago, when former president Suharto on August 23, 1976, inaugurated the Nurtanio Aircraft Industry (Lembaga Industri Penerbangen Nurtanio – Lipnur) in Bandung, West Java. The company was named after Indonesia’s pioneering aeronautical engineer, Air Marshal Nurtanio Pringgoadisurjo, who died in 1966 while test-flying an aircraft he had designed himself. In 1986, the company’s name was changed to the Nusantara Aircraft Industry (Industri Pesawat Terbang Nusantara – IPTN).
Under the management of Suharto’s German-trained research and technology minister B.J. Habibie, IPTN received huge amounts of government funding to assemble light aircraft and helicopters, but it never managed to make a profit. In 1998, the regional financial crisis and fall of Suharto resulted in IPTN being forced to undergo significant budget cuts. Since then, the costly firm's fortunes have nosedived. In 2001, IPTN was renamed PT Dirgantara Indonesia after being placed under control of IBRA.
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