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British Aerospace To Cooperate With Indonesia on Airplanes, Cars

November 25, 1993

LONDON (AP) _ British Aerospace PLC said Thursday it agreed with Indonesia to cooperate on making passenger cars for the Indonesian market while exploring a venture to build regional turboprop airplanes.

The agreements, involving British Aerospace and its automaking subsidiary, Rover Group, were signed Tuesday in London by Ing B.J. Habibie, the Indonesian minister for research and technology, and Dick Evans, British Aerospace chief executive.

On the airplane deal, British Aerospace and an Indonesian partner, the state-run aircraft builder PT Industri Pesawat Terbang Nusantara, will look into the possibility of forming a joint venture to design, develop and manufacture regional turboprop aircraft.

British Aerospace already assists IPTN, based in Bandung, West Java, in making its twin engine, 44-seat turboprop CN-235 aircraft suitable for the European market. Indonesia is also a customer for British Aerospace’s Hawk jet trainer aircraft.

A British Aerospace spokesman, Simon Raynes, said he did not know whether the joint venture, if it works, would create jobs in Britain. It seemed possible that some jobs could be preserved that might otherwise be lost eventually, he added. British Aerospace has shed thousands of jobs in recent years as it restructures its business.

The auto deal involves Rover Group and the Indonesian Agency for Strategic Industries.

They plan to design, develop and manufacture passenger cars that will initially be sold in the domestic Indonesian export market and later could be exported. The cars will be built in Indonesia, using Rover’s 1.1 liter ‘K’ Series engine, which is used in small cars, as well as other Rover technology.

The cars probably would not use the Rover brand name, Raynes said. It remains unclear where the cars will be built, when the project will begin or how the financing will be handled, he said.

British Aerospace was not yet certain about how much money it would be ready to invest in either venture, the spokesman said.

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