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Thursday, June 1, 2017

Reality check for Proton vendors after sell-out



YOURSAY | ‘Proton's vendors have to break out of their protective cocoon and start to compete.’
Cocomomo: It is reality time for Proton car vendors.
They have raised concerns that Geely’s acquisition of a 49.9 percent stake in Proton may result in more suppliers of the national car closing shop, in particular after the deal takes effect and if the China company brings in its own vendors and strategic partners.
But if things continue as there are and Proton continues to be forced to use these inefficient vendors, Proton is going remain stagnant, if not get worse.
Geely should within certain limitations be given a free hand to manage Proton as a business and not as rent-payers to these rent-seeking vendors.
If Proton continues to operate as previously, neither Geely nor any other entity can save it. Any negative perception of Proton would be the fault of its staff and vendors.
Puzzling: Indeed, Proton's vendors have to break out of their protective cocoon and start to compete.
In the automobile business, it is survival of the fittest. If it is too hot for you, get out and do something easier.
Hplooi: Two decades ago we had a 'construction joke':  If you need to dig a long trench in Malaysia, we would get a mechanical digger with one driver who would make short work of a mile-long trench.
However in China, they would line up men a mile long and dig the trench even faster than the mechanical digger.
That's how China (back then) were building roads. That's how manufacturing got started too.
However, today counter-intuitively, manufacturing jobs are actually shrinking in China.
China is currently the biggest in rolling out robotics and automation in the manufacturing industry. So, Malaysians hoping to find work in manufacturing will have to look for new skills.
In the case of Malaysian vendors, it is really a sad indictment of the business-politics nexus. Cronies entrusted to build up a support industry wasted the opportunity.
Vendors are a major bane on our economy as they leech off government-linked companies which have a dominant role in the Malaysian economy, such as Tenaga Nasional Berhad, Telekom Malaysia, etc.
If for 20 years or more, the Proton vendors, protected by iron-clad contracts by virtue of their political connection and gifted with government handouts, could not make a dent in the Asean market, how do you think they can survive a more open vendor system?
Asean has a thriving car market and industry. It is really sad that despite Malaysia being first of the mark, Thailand has already overtaken us in car support industries.
If the vendors are really competitive, they will survive with or without Proton or Geely.
Anonymous 2460391489930458: As far as Proton is concerned, a China partner is better than no partner as Proton is already dying.
Without Geely, Proton will die faster. So, there is no point finding fault with Geely. After all, who else wants to partner Proton, a weak company with weak management that leeches on the (also) weak Malaysian government which is run by allegedly corrupted leaders who sabotage and stifle the country's economy with racially-based policies?
Now that Geely owns a large chunk of Proton, it can and should do what is necessary to survive and grow their investments, even if this involves dismantling all the crony vendor system that has been milking Proton for far too long.
Anonymous #70881335: The car industry is a matured industry. It is extremely competitive.
Having said that, the Proton vendors have had umpteen years to improve and compete with everyone else. But have they?
The “Ali Baba” arrangements, the subsidy mentality and the total lack of commitment to quality and cost are the reasons for their downfall.
Clever Voter: There was a time when consumers were held to a ransom by a company called Edaran Otomobil Nasional Berhad (EON) which insisted all extras had to be paid.
Proton vendors enjoyed protection. The procurement had a noble intent but abused as some only repackaged the parts imported elsewhere. There was hardly any trickle-down effect.
Fast forward to today, if the new owner is to make this a success, it has to make sure the supply chain understands quality and costs.
Above all, there are ethical concerns across the board. Geely owners, despite having deep pockets, will need to learn quickly that the workforce quality will not be what they were told it would be.
David Dass: Writer Dennis Ignatius refers to our previous 'nuanced' approach. We were careful to stay non-aligned. We had defence pacts with some nations.
A movement towards China could result in a movement away from the US and our traditional allies. Perhaps we think that we can play one against the other to our advantage. We will be incredibly naive if we think that we are smarter than the big powers.
China plans for a hundred years. The US did not become the most powerful nation in the world by accident. Sri Lanka is learning an expensive lesson. It has a port too large for its own use. But it has to pay for it.
And China is building a spanking new city for Sri Lanka. How will they pay for it? Two-thirds of the city will belong to China. Its largesse comes with strings.
Do we need the projects with China? Are we paying a sensible price? Are these our priorities? Are we giving up our territorial claims as part of the price? We must be more cautious.
Anonymous 759201436321741: Perhaps, it a bit too late to even speculate whether China has a plan for Malaysia. They already got a foot in and the door could be closed.
Of course, they have a grand design for Malaysia. With a Chinese Malaysian population of some 20% of the total population, is that not an obvious answer?
Besides Malaysian Official 1 (MO1) is at his most vulnerable position and he has no bargaining power to fend off a predator the size of China.
At the end of day, to borrow a local colloquial, they are the equivalent of the Ah Longs that borrowers are so familiar with and so afraid of.

Eric Ng: Poor Singapore... missing out on all the actions. He who laughs last, laughs best. But who is going to laugh last?- Mkini

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