TM & Tun's query on the Sales Of Augusta

[jamesweh]

Today in the Star, both TM & Tun queried on the sales of MV Augusta for Euro 1, when MV Augusta was bought for Euro 70 Million.
They have brought up a very strong point, since Proton is a national treasure and since the sales of MV Augusta was a significant event, there should have been a referendum debating the sales of MV Augusta, at the same time the list of bidders and their propose bid price for MV Augusta should have been made public.
But again, the whole issue was just "Bulldoze" through by the board of Proton and possibly as a ploy as most fund managers are on leave during December 28th, the sales was then announced at a shocking price of Euro 1.

I would like to make a point, I share TM & Tun's views but, in the first place why was MV Augusta bought? With a debt of 236 Million Euro and the fact that MV Augusta was not exactly a hot item, if it was giants like Renault or Fiat would have rush to buy it.

If I had RM 2 B for cash reserves, I would have done the following;

1. MPV programme. Proton needs a 6 / 7 seater vehicle. This to me is the biggest fallacy of TM's reign.
2. Engaging TUV to audit quality control on all aspects of Proton's production line, including Vendors and also R&D. Savvy's TUV approval is still a marketing ploy which should be applied to the organization as a whole.
3. Engaging more quality people in Proton R&D including expatriates which have solid experience in automotive engineering. I am not being sarcastic, but if you average out all the R&D personnel ages in Proton, you would not exceed 40 years of age. This means that the Proton's R&D personnel is really very young, but I am not saying that young is no good but the R&D team needs a mixture of people and if it means that a foreigner can be employed to improve the design, then employ them as it would bring the necessary X factor to Proton.

So why buy MV Agusta for 70M Euros when your own back yard is not clean up. At the same time don't forget Proton still owns Lotus. You dont need two engineering companies, clean up the father, Proton!

 

[zephyr3d]

lotus could have been better if they were absorbed by other companies, instead of proton... such a waste actually.. proton is just a parasite... what they done to improvise lotus? they can't even do it upon themselves... yet wanna buy other companies..

 

[jamesweh]

Lotus

The sales of Lotus was also very similar to MV Augusta. Lotus was a loss making company which GM a giant did not want. I guess TM felt that he was a better manager than GM (I dont think so!).
But since then Lotus accounting results have improved, but my guess that it is still a loss making company.

 

[wetsprocket]

Proton's board should answer the good Tun and TM - the arithmetic is very simple. When Tun & TM bought MV Augusta, it not just for E70million. Becoz of its outstanding debts, Proton will be out of pocket by E70million + E236million = E306million. When Proton sold MV Augusta, it wasnt just in consideration of E1, it was in effect transferring the debt of E236million, thereby saving Proton from incurring losses of this much. Its called cauterisation - in an emergency situation, you cut off the rotting parts to save the good parts.

Now Tun and TM should answer Proton's board - what the hell were they thinking? Did they seriously believe they could turn around MV Augusta such that it would be able to pay off the E236 million debt and give Proton returns in 3 years (when the debts were supposed to be repaid)? Similarly valuable engine technology can surely be acquired by paying less than E306million.

Just like every single corporate decision made by TM in the last 5 years, it was motivated not by good business sense, but by dangerous, unfounded, unjustifiable optimism in the face of growing competition and falling profits in the industry.

 

[dean75]

dont forget VW ... they both already agree to the term rite?
...so kacau lah my head with all this mess...

 

[Doink]

no use commenting on proton...it will never change...lets just concentrate on how to improve our own machines...rite???who cares...when we critizise proton for our own good...yet it felt to deaf ears...i have this to say...all the best to you proton...i will never buy a proton...you have just lost a supporter...

 

[zan]

err dean, VW had dropped the idea of acquiring proton, or having a collaboration in any terms whatsoever.

proton acuired lotus some 10 years back during the days of late Tan Sri Yahaya. Lotus was struggling in auto world, very little financing due to high operation cost but less income in a way that they dont have any mass production cars.

Tan Sri Yahaya was the person who dare enough to bring Isuzu Trooper and Mitsubishi Pajero into Malaysia back in 1983. no other person dared too take such risk of unknown market. he took the risk once more with buying over Lotus. too bad he passed away in a tragic helicopter crash some time in 96/97.
otherwise, we cud see many exciting models from proton. the sporty Tiara 1.4 EFI for example was dropped by the board of directors after he passed away. so as Tiara 1.5 diesel (maybe turbodiesel).

actually, i was thinking M and TM were just lepas gerammm... he he
but already Proton had mentioned they may respond to that soon.

MV augusta has a long history in automobile engineering. not much benefits though unless proton plans to built and sell motorcycles. it also owned Cagiva and CRC and if not mistaken Husqvarna (correct me if wrong)
i truly agree with james, the money shud be spent elsewhere.

1) proton failed miserably with Juara (actually a testbed for malaysian market). what shud have been done was to create a 5 seater MPV on Waja's platform and then a strecthed 7/8 seater.
2) apart from improving built quality, proton shud pay attention to marketing. they are too afraid of entering indonesia, thai and india car market (possibly the largest RHD market in Asia and closer too). those ppl enjoy cheap and no frill cars.
3) i believe proton's R&D dept are full of highly educated malaysians but zero imagination on how to make cars.

our comments may fall on deaf ears, but there's no harm trying. our ideas maybe passed on in circles and may take years before they reach proton but there's no harm trying. i hate to see proton closing down.

 

[Joeker]

Try to keep political sentiments away from this thread.

I am really amazed how on earth Proton and MAS could lose so much money. (despite govt giving them so much special advantages and incentives)