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liquidity crisis that has dogged state-owned aerospace firm PT Dirgantara Indonesia (DI) in Bandung, West Java, is beginning to affect employees’ wallets.

The chairman of the company’s employee association, Haribes, said worker salaries had been paid out late since September this year, adding that salaries for October and November were paid out on Dec. 2 and Dec. 9 respectively.

“[December’s] salary should have been paid out on 23 but finance could not confirm that it would be paid on time,” Haribes told The Jakarta Post in Bandung on Wednesday.

Employees staged a rally at the company’s factory on Nov. 10, demanding an official explanation regarding the late payment. Dirgantara president director Budi Santoso at the time blamed the company’s weak finances due to unfulfilled sales, as the company had only achieved 40 percent of its target.

“Our main concern is that the company might opt for second phase of mass layoffs,” Haribes said.

Financial problems forced the company to send home 9,670 employees in July 2003, a move that was met with protracted protests and legal suits.

Employees association secretary Tri Handoyo said the late pay out was a shock to the employees because they were left in the dark regarding the company’s cash flow and performance problems.

In 2003, he said, employee salaries were paid out on time, even for those sent home. “This is not the case with today’s situation,” Tri said.

The crisis has reportedly forced the company to stop making Jamsostek (social security insurance) payments for its employees since July this year, estimated at Rp 8 billion (US$889,000) in total.

The company is also blaming its poor financial health for its inability to pay health service bills at a
number of partner hospitals, prompting the hospitals to refuse to provide healthcare services to Dirgantara employees unless they paid in cash.

Tri also expressed concern that despite its weakened state, the company in July 2010 increased employee salaries by 10 percent and allowances for division heads 400 percent from Rp 2.5 million to Rp 10 million a month, swelling the company’s employment costs to Rp 23 billion
a month.

Dirgantara integration director Budi Wuraskito said the financial crisis stemmed from the government’s failure to convert the company’s debt into venture capital three years ago.

“Because of that, the company’s equity became too small to be used as collateral for a bank loan,”
Budi said.

He urged the government to reaffirm its commitment to giving the firm a $200 million defense system contract.