Save the People's Company!

It is ironic that when our national car company was in dire straits and was contemplating a new ‘strategic direction’ by going into partnership with an European manufacturer with an established brand name and R&D capabilities, a hue and cry was raised by certain quarters. They argued that Proton is a national asset and it should not be ‘given up’ so easily. The same people brought forth the argument that Proton is the people’s company and thus it should be protected. It mattered little to them that in business, having a strategic partnership is not the same as selling out. Nevertheless, the din that they raised was loud enough to scuttle those plans. At least temporarily.
Strangely lately, as a behind the scene battle is raging for control of Proton, these very same people have not argued for the ‘independence’ of Proton as a people’s company! One will have to be an avid reader of business publications to put the pieces together but suffice to say that there is an intense jostling by certain individuals and their companies to buy over the government’s stake in Proton which is currently held via Khazanah and the EPF. The asking price by these individuals for this stake is way below the real value of Proton currently; at least that's the impression I get by putting together the bits and pieces that are trickling out. I will not be surprised though that the offered price is obscenely low as such things have happened in corporate Malaysia before.
I have been critical of Proton. In fact, I used to just hate reading every move that Proton used to make. I used to wonder for whom exactly was Proton building its cars for? And what was all that raving about Proton’s export capability? And yes, the Islamic car! That too. But of late, Proton has shown it self to be a savvy company (the pun is intended). Like our national carrier, left alone to decide what is best for its business survival, Proton showed a remarkable ability to be creative, strategic and market savvy. Something that many pundits thought were no longer within Proton’s competencies after years of proxy wars and un-fair protection given to it by those who used its existence for their own political mileage…and empty nationalistic rhetoric and chest thumping.

Now that this venerable company is rising and recovering from an extremely bad patch in its history, there are those who are jostling for some low hanging fruits at the expense of Proton’s true value. Lets face it, Proton’s true value lies in 3 areas : Its land bank located in the prime area of Shah Alam which I reckon could be close to half a billion ringgit in value, its under utilized manufacturing facility in Tanjung Malim and; its new found sexiness among global automotive players. Also, as was one my wishes at the beginning the year, Proton is making serious inroads into the future of automotive market : India and China. Especially India where the market is less crowded although probably with more entrenched interests; but nothing Proton can’t handle as Malaysian companies are regarded highly in the subcontinent. Add to these, Proton’s successive hit models in the form of Persona and the new Saga (and I suspect the Exora too very soon), Proton has added a couple of hundred millions to its value by showing a strong future value proposition. The market is also enthusiastic with the planned arrival of the Mitsubishi Lancer as a Waja replacement model in 2010. Don’t forget that Proton has Lotus in its stable too. All these are surely mouth watering prospects for wily businessmen, their cohorts and their sons and daughters.
Hands off gentlemen! The Malaysian people suffered with Proton. We bought its cars despite its poor quality and horrible delivery time. We put up with its declining brand name. We stuck with it and now we should have a say in its direction.

Unless the offer being made to the government is something that is totally fair value for Proton’s current and future potential and unless the whole transaction is transparent and above board, the Malaysian people should send a clear message to the government that we will no longer tolerate the corporate musical chair of the past. We may yet see a new champion to be proud of. The current management team of Proton has done a remarkable job doing an almost thankless job. Lets give them time and see where they can take this company. The global automotive market is a largely transformed one today and Proton may yet find a lucrative niche for it self.

After all, those stalking Proton are also loved by the Malaysian people for their respective successes and charisma. Don’t get greedy now and loose that goodwill.

If ever, now is the time for Proton to be saved. It is a people’s company.