uly 25, 2005 06:44 ET
http://sg.biz.yahoo.com/050725/15/3tppo.html
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Malaysia's Proton: Board Will Not Renew CEO Contract
(MORE TO FOLLOW) Dow Jones Newswires
July 25, 2005 06:46 ET
Malaysia's Proton CEO Mahaleel Ariff To Step Down
KUALA LUMPUR (Dow Jones)--The embattled chief executive of Proton Holdings Bhd. (5304.KU) will step down, weeks after publicly criticizing the government's "unfair" automotive policy.
Proton's board of directors has decided not to renew CEO Mahaleel Ariff's contract, the company said at a press conference Monday.
The outgoing CEO, a protege of former prime minister Mahathir Mohamad, earlier this month told a local newspaper that Malaysia's automotive policy of gradually removing protective tariffs was hurting the 42.7% government-owned national car maker, prompting a strong rebuke from Prime Minister Abdullah Ahmad Badawi.
(MORE TO FOLLOW) Dow Jones Newswires
July 25, 2005 06:57 ET
Malaysia's Proton CEO Mahaleel Ariff To Step Down -2
Proton said Mahaleel will be "on leave" from Tuesday and will "retire" from the company in September. Proton also said an executive committee is now searching for a new chief executive for the company, which has market capitalization of MYR4.64 billion.
The government protects Proton by imposing high tariffs on foreign cars and by allowing Proton to pay a smaller excise tax.
Mahaleel was appointed chief executive of the 20-year-old carmaker in April 1997, but he had been at odds with the company's board for over a year now on strategic issues. These include the prospect of Proton teaming up with a multinational manufacturer in a bid to counter stiff foreign competition.
Those differences boiled to the surface in February when Abu Hassan Kendut resigned as chairman of Proton's board after the government overruled an earlier decision by directors not to renew Mahaleel's contract.
One of Malaysia's best-known companies, Proton is the sole surviving vestige of an ambitious industrialization drive initiated by Mahathir in the early 1980s. The government poured billions of dollars into steel and cement ventures that ultimately fared poorly.
Now, Proton is under siege. A plan by the 10-member Association of Southeast Asian Nations for a regional free trade area, known as AFTA, requires Malaysia to dismantle its high import tariffs for automobiles.
The Malaysian government is committed to removing the protection, Abdullah said earlier this month, and urged Proton to improve its quality to compete with foreign makers.
"The protection is being reduced gradually because that is the right thing to do," Abdullah said. "While we gradually reduce protection, Proton must improve quality and capability so that it can compete with other cars."
In recent years, Proton also has seen its dominant market share chipped away by rivals such as South Korea's Hyundai Motor Co. and Japan's Nissan Motor Co., which have introduced locally assembled models at competitive prices.
Proton is in talks with Volkswagen AG to establish a partnership where the German car maker would use the Malaysian company's production facilities to assemble Volkwagen cars for the Southeast Asian market. Proton, in turn, would benefit by tapping into Volkswagen's technological know-how to boost the quality of its own models.
http://sg.biz.yahoo.com/050725/15/3tppo.html
ADVERTISEMENT
Malaysia's Proton: Board Will Not Renew CEO Contract
(MORE TO FOLLOW) Dow Jones Newswires
July 25, 2005 06:46 ET
Malaysia's Proton CEO Mahaleel Ariff To Step Down
KUALA LUMPUR (Dow Jones)--The embattled chief executive of Proton Holdings Bhd. (5304.KU) will step down, weeks after publicly criticizing the government's "unfair" automotive policy.
Proton's board of directors has decided not to renew CEO Mahaleel Ariff's contract, the company said at a press conference Monday.
The outgoing CEO, a protege of former prime minister Mahathir Mohamad, earlier this month told a local newspaper that Malaysia's automotive policy of gradually removing protective tariffs was hurting the 42.7% government-owned national car maker, prompting a strong rebuke from Prime Minister Abdullah Ahmad Badawi.
(MORE TO FOLLOW) Dow Jones Newswires
July 25, 2005 06:57 ET
Malaysia's Proton CEO Mahaleel Ariff To Step Down -2
Proton said Mahaleel will be "on leave" from Tuesday and will "retire" from the company in September. Proton also said an executive committee is now searching for a new chief executive for the company, which has market capitalization of MYR4.64 billion.
The government protects Proton by imposing high tariffs on foreign cars and by allowing Proton to pay a smaller excise tax.
Mahaleel was appointed chief executive of the 20-year-old carmaker in April 1997, but he had been at odds with the company's board for over a year now on strategic issues. These include the prospect of Proton teaming up with a multinational manufacturer in a bid to counter stiff foreign competition.
Those differences boiled to the surface in February when Abu Hassan Kendut resigned as chairman of Proton's board after the government overruled an earlier decision by directors not to renew Mahaleel's contract.
One of Malaysia's best-known companies, Proton is the sole surviving vestige of an ambitious industrialization drive initiated by Mahathir in the early 1980s. The government poured billions of dollars into steel and cement ventures that ultimately fared poorly.
Now, Proton is under siege. A plan by the 10-member Association of Southeast Asian Nations for a regional free trade area, known as AFTA, requires Malaysia to dismantle its high import tariffs for automobiles.
The Malaysian government is committed to removing the protection, Abdullah said earlier this month, and urged Proton to improve its quality to compete with foreign makers.
"The protection is being reduced gradually because that is the right thing to do," Abdullah said. "While we gradually reduce protection, Proton must improve quality and capability so that it can compete with other cars."
In recent years, Proton also has seen its dominant market share chipped away by rivals such as South Korea's Hyundai Motor Co. and Japan's Nissan Motor Co., which have introduced locally assembled models at competitive prices.
Proton is in talks with Volkswagen AG to establish a partnership where the German car maker would use the Malaysian company's production facilities to assemble Volkwagen cars for the Southeast Asian market. Proton, in turn, would benefit by tapping into Volkswagen's technological know-how to boost the quality of its own models.
