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Nazri and the Proton saga

 | March 5, 2017

Should he be blaming Mahathir?

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nazri-mahathir

Has Nazri Aziz finally crawled out of the Putrajaya woodwork only a few days ago to notice that Proton is in trouble? Why did he keep quiet when Mahathir Mohamad was still prime minister? In fact, Nazri was Minister for Entrepreneur Development from 1999 to 2004.

It’s disingenuous of the Tourism and Culture Minister to say that Proton is Mahathir’s white elephant. Is it not also Khazanah’s? After all, like MAS, Proton’s troubles appear to have begun after Khazanah acquired it.

With the advent of social media, Nazri must have been aware that criticisms against Proton have been flooding the networks. People complain about the window seals, the anti-rust coating and the power windows. Malaysians living overseas notice that foreign Proton models are more sturdy and sport additional safety features. They also say the exported cars are cheaper than those sold in Malaysia.

Nazri’s outburst against Mahathir was a reaction to the former PM’s objections to the sale of Proton shares to foreign interests. Pointing to Proton’s continual requests for additional funding, Nazri claimed that the company was a failure.

In one fell swoop, Nazri insulted the millions of low to middle income Malaysian families who would not have been able to enjoy car ownership without Proton. Nazri has also neglected to consider the interests of hundreds of thousands of workers who depend on Proton to make their living – the Malaysians who work for Proton itself and those employed in related industries.

Proton could have been more efficient, but why did Nazri not deal with the problems years ago rather than raise them now, and only to use them as ammunition against Mahathir?

The problems in Proton are analogous to the problems in the civil service. Nazri, like the rest of us, has always been aware of them. These problems include high wages and various benefits which cannot be sustained, especially in these times of economic trouble. Few have the political will to confront these problems.

In 2012, Mahathir told Bloomberg TV that Proton had done rather well since it was launched in 1983. Indeed, in 2002, the year before he resigned, Proton was enjoying a 60 per cent share of the car market.

Mahathir has attributed Proton’s subsequent decline to political interference, the government’s failure to collect import duties from car importers and, above all, its failure to chart a clear future for the company.

Proton started declining after Tengku Mahaleel Tengku Ariff was removed as its managing director in 2005. Tengku Mahaleel had successfully accumulated cash reserves in excess of RM4 billion, and built a huge 150,000-unit plant in Tanjung Malim.

Some observers allege that Tengku Mahaleel’s removal was a direct result of his criticism of the AP system. With the emphasis on importing vehicles, there was a danger that Malaysia would become an automobile assembly hub instead of an automotive manufacturing base.

These comments displeased the government, and Tengku Mahaleel’s contract was terminated.

During Khazanah’s guardianship of Proton, the funds that Tengku Mahaleel had carefully built up were depleted. Where has the money gone to? With Proton needing large cash injections, it is not surprising that it will be sold to anyone who is interested.

Mariam Mokhtar is an FMT columnist.

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