Andrzej Jeziorski/SINGAPORE

Indonesian aircraft manufacturer Industri Pesawat Terbang Nusantara (IPTN) is planning to slash its huge workforce by 33% over the next two years.

Some 700 staff will go next month as IPTN starts shedding 5,200 workers, reducing employee numbers to 10,500 by 2001, says the company. Employees over the age of 53 will be encouraged to take early retirement, while other staff may be laid off.

Redundancies will primarily hit non-technical staff without higher education.

The Bandung-based company will also begin shedding its peripheral businesses, such as transportation and printing, focusing exclusively on aerospace activities like building the CN-235 turboprop as the financially troubled company seeks to slash overheads.

The manufacturer - which used to be run by then-technology minister Bacharuddin Habibie, now the country's president - previously counted on Government cash to push ahead with projects like the N250 regional turboprop and the proposed 114- to 132-seat N2130 jet. It ran into serious trouble, however, when the International Monetary Fund forced a halt to Government handouts to state-owned industries as part of its $40 billion Indonesian aid package early in 1998.

The company is still looking for funding from banks and international aerospace companies to continue the heavily delayed N250 programme. IPTN now optimistically says the aircraft could be certificated in early 2000, having flown some 600 hours with the two existing prototypes to date.

IPTN expects to finish design work on the N2130 this year, but says that further work "depends on the Dua Satu Tiga Puluh (DSTP)company, which was formed to back the $2 billion programme. DSTP shareholders are demanding a refund of their investment, arguing that they were forced into making it by the government of ex-president Suharto.

Source: Flight International