Garuda Indonesia Rescue Mission On Robby Djohan's Shoulders

Garuda Indonesia aircraft (Source: Wikimedia Commons)

JAKARTA - In 1997-1998, Indonesia fell into the worst recession. The impact is broad, from banking to business. Unemployment increases. Companies are in danger of going out of business, including Garuda Indonesia, which almost went bankrupt due to huge debts. The New Order government appointed Robby Djohan as the President Director (Director). He is a savior. Garuda Indonesia is growing rapidly.

The Indonesian economy was in disarray in 1997. The rupiah, which is a reflection of the nation's self-esteem, fell to its lowest level. One dollar, which was originally worth Rp. 2,000 to Rp. 15,000. This condition is getting worse because Indonesia is still dependent on a number of imported products.

Some imported goods, such as food, fruits, fuel, machinery, bicycles, to computers. A series of products that experienced a significant increase. Take the example of a computer, which before the recession cost Rp. 1 million up ten times.

Speculation about the cause of the recession arose. Each expert even expressed their own views. The outline of the various arguments concluded that the recession did not happen suddenly. The recession emerged from the shift in political and social power that occurred in Indonesia in the 1980s. The problem triggered high debt and changed the direction of the banking system to be more liberal.

“All of these problems lead to the transition to a free market that is taking place in Indonesia. One of the arguments that is often put forward is the economic recession in Asia, especially in Southeast Asia in 1997 which seeped into Indonesia. In particular the crisis which is also known as the Asian crisis started in Thailand where the government adopted a rigid fixed exchange rate system.”

"Although this system has been implemented for a long time, the swelling of short-term external debt and the progressive opening of international capital flows have brought the Thai economy to a difficult position due to pressure from the strengthening of the US dollar," said Nazamuddin in the book Understanding Macroeconomics Through Data and Facts (2020). .

Suharto announces resignation (Source: Wikimedia Commons)

Indonesia's economic situation actually got worse when entering 1998. The recession began to take its toll. The impact of the crisis is getting worse. The banking sector, foreign debt, to the chaotic political situation are some of them.

At that stage, all Indonesian people could not really enjoy the fruits of their hard work. The recession not only marked the beginning of the Indonesian economic crisis, but also marked the beginning of the collapse of the New Order regime. In fact, before the recession, no one thought that Suharto, the '32-year-old general', would step down.

“Looking back for a moment in 1998-1999 there was an economic crisis and unemployment throughout Indonesia. The Indonesian economy was in free fall and reached a low point in 1998, when there was a very severe economic recession. Inflation reached 75 percent in 1998-1999, the highest in Indonesian history.”

“But in fact it could drop to 10 percent in 1999-2000. To be able to achieve this, the government implements reduction measures. As a result, many companies went out of business due to high interest rates and production costs. This has led to massive unemployment," wrote Rosramadhana in the book Strategy and Socio-Political Problems of the Indonesian Regional Autonomy Administration (2018).

Mission to save Garuda Indonesia

Garuda Indonesia plane (Source: Commons Wikimedia)

Garuda Indonesia airline became one of the companies that almost went bankrupt because of huge debts during the recession. The state-owned company has been losing money for seven years. This condition is exacerbated by the reputation of Garuda Indonesia, which is getting worse day by day.

Passengers who are quiet so often delay. At its peak, Garuda is often referred to by many as 'Garuda Always Reliable Until Delay Announced'. The New Order government did not remain silent. Mainly, Suharto. The Smiling General understands that Garuda Indonesia is the pride of Indonesia. If Garuda goes out of business, Indonesia will lose something very important.

Suharto immediately carried out a mission to rescue Garuda Indonesia. He assigned the first Minister of State-Owned Enterprises, Tanri Abeng (1998-1999) to think of the best solution so that Garuda Indonesia remains in the air in the world's skies.

Suharto then gave him a folder containing Garuda Indonesia documents. Suharto did not forget to say that Garuda Indonesia had wanted to be bankrupted by its creditors. Just wait time. Suharto hoped that Tanri Abeng could take revolutionary steps to revive Garuda Indonesia.

“I studied the file in the car. In fact, it has been seven years since Garuda Indonesia has been at a loss. During that time, the losses borne by the national airline were covered by dollar debt. The condition became very serious when the rupiah exchange rate skyrocketed to Rp. 15,000 per US dollar. That's what happened, on the fifth day I served as a management practitioner under Pak Harto's leadership, I had to fix the complex crisis in other people's work," he wrote. Tanri Abeng in Pak Harto's book: The Untold Stories (2011).

Tanri Abeng moved quickly. He who received Suharto's blessing immediately cut the CEO and all directors of Garuda Indonesia. One name was later proposed by Tanri Abeng to Suharto. That figure is Robby Djohan, a banker.

Robby Djohan's biography (Source: Wikipedia.org)

Tanri Abeng emphasized that Robby Djohan was the right choice because his reputation could cool creditors. Robby Djohan was officially the number one person on Garuda Indonesia in 1998.

In fact, not everyone agrees with the appointment of Robby Djohan. The banker figure is considered incompetent because he is not from the aerospace world. Moreover, Robby Djohan has a condition that he is given the authority to choose the directors who will fill Garuda Indonesia's seats.

Robby Djohan had a demonstration by all Garuda Indonesia employees. But he chose not to bother. Robby Djohan began to analyze one by one the problems faced by Garuda Indonesia. He began to cut international flight routes that were empty of passengers.

Robby Djohan also began to carry out intensive maintenance of Garuda Indonesia aircraft. Unlike in the past, because they are not maintained, 50 percent of Garuda Indonesia's planes are not airworthy. He also began to cut officials at Garuda Indonesia who in fact were close to Suharto.

Robby Djohan then replaced those names with more motivated young workers. Finally, Robby Djohan began to prepare the seeds of new leaders so that Garuda Indonesia can fly high in the future.

“In a relatively short time, only eight months, Garuda was able to improve its image, and even a year later managed to make a profit of around 60 million dollars. In fact, if Robby saw Garuda as an ordinary company, he would definitely liquidate it. However, he chose to restructure considering that Garuda is the flag bearer of Indonesia.”

"Restructuring means getting rid of the bad by making fundamental changes including changes in leadership, operations management, and approach to the market. His sincerity was seen when he moved his office to Soekarno-Hatta Airport so that he could directly monitor the situation on the ground," concluded Ekuslie Goestiandi and Berny Gomulya in the book TP. Rachmat on Excellence (2018).

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