THE JOURNAL consists of selected, most notable and newsworthy POSTINGS OF THE DAY.

Monday, February 12, 2007

Proton's Future

TM: "Proton can choose to be a winner or a loser!"

( From Screenshots of 12.2.2007 )

Former Proton Group CEO Tengku Mahaleel Tengku Ariff throws the present management a challenge: "Who will Proton partner with - a winner or a loser?"

He also posed four questions to the Government, which owns Proton on behalf of the taxpayers, to clarify mounting doubts among the public.

VW the best strategic choice

In an exclusive interview published in the Oriental Daily News today, Tengku Mahaleel says: "Volkswagen is the best strategic choice. When Proton cars are German cars, Malaysians' confidence level will come back instantly; if it is a French car, then Malaysians may cry 'aiyah'!"

By choosing Volkswagen, he said Proton could instantly access the Asean automobile market with annual sales of 1.5 million cars. With that, Proton deals, which now number about 400, can be re-categoried to distribute different brands of the Volkswagen marque.

According to media reports, there are at least four suitors from overseas and three more from local conglomerates which had expressed their interest to take strategic control of Proton, the ailing national car maker.

Names of foreign suitors cited by the Press include Volkswagen (Germany), Peugeot-Citroen (France), General Motors (USA), and Daimler-Chrysler (Germany).

The local suitors of Proton's 42.7% controlling stake, now held by Khazanah Inc., are from the Naza Group, which is controlled by AP King SM Nasimuddin SM Amin, and DRB-Hicom controlled by dominant shareholder Syed Mokhtar Al-Bukhary.

The third local suitor is the Sime Darby Group, which is a GLC currently caught in a mega-merger to make it the world's biggest plantation-based giant. It is said that with the mega-merger, its automobile business (BMW) will be asset-stripped to a new group of beneficiaries.

The scramble for Proton's controlling stake which involves the seven parties will be finalised by next month.

4 questions for the government

Tengku Mahaleel also demanded the government to disclose all details of negotiations with the suitors before the announcement of the ultimate winner of the partnership with any of the seven suitors courted.

Going by the records, forerunner Volkswagen, had called off its joint-venture plan with Proton in January 2006, which subsequently caused the Proton counter and market share to plunge.

Volkswagen CEO Bernd Pischetsrieder was quoted by the Press that it would not consider a joint venture with Proton in the future as there was no accord on the JV plan among Proton, the Malaysian Government and Khazanah Inc.

"What is the government's thinking now? If the government doesn't say it, how do we solve the problems?" Tengku Mahaleel asked. "The controlling stake in Proton is the major hurdle of the issue."

He listed out four key questions that the government should answer:

1 ) Is the automobile industry important to our national economy?
2 ) Do we want to protect our human capital (for the automobile industry)?
3 ) Do we want to give Malaysians a high-level career opportunity?
4 ) Do we still want to create the entrepreneur spirit from tyhe mold of Small and Medium-scale Industries?

Tengku Mahaleel said whatever the government decides on the four questions, the answers will be polarised.

If the answer is yes, the solution factor will be Y; if it's the opposite, the solution factor will be X.

The cliff-hanger from Tengku Mahaleel is this: "The government must be very clear; what do you actually want for this country?"