Then the Crisis struck. Having already restructured once, there is not much more Vitarich can do, and the company is seeking a strategic investor. Chairman Rogelio Sarmiento says 1998 will be a bad year. While many companies are having difficulty restructuring, a few seem to be resisting, hoping to wait the Crisis out. In South Korea, leading chaebol conglomerates are resisting government urging to trim their bloated businesses and huge debts while using their dominance of the economy to gobble up funds and crowd out smaller firms.
Most companies have no choice but to rethink and revamp their businesses from the ground up.
The good news is that even the most indebted, crony-ridden company can benefit from restructuring. As Garuda's prospects were spiraling downward in June, Jakarta put Robby Djohan in the airline's cockpit. The respected banker quickly moved to quash uneconomic routes, cancel expensive aircraft leases, dump non-core assets and trim 3,000 workers. Garuda still faces heavy turbulence ahead, and Djohan is moving on to head up a new bank being formed out of four troubled state banks. But the airline looks set to keep flying and may even return to profitability in 2000.