Does Volkswagen Chief Wants to Meet Badawi?

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Apr 09 2007
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Premier Abdullah Ahmad Badawi has not yet met the chairman of Germany’s Volkswagen (FRA: VOW) for talks on a possible tie-up with state-controlled carmaker Proton Holdings Bhd (KLSE: PROTON, stock-code, 5304). Loss-making Proton, which faces a shrinking market share in the increasingly competitive domestic market, is looking to tie up with a global car-maker to boost its sales and turn around the company.

“I have not seen him yet,” Abdullah told reporters in reply to a question on whether he had met the chairman of the German carmaker. “He has not made his appearance here. I don’t think I can wait too long … I can’t be waiting forever, don’t you think so?” Pressed for the date of a meeting, Abdullah said, “I will not tell you when.” Yeah right, I bet he doesn’t have a clue on when this piece of problem could ever be solved himself. And I think the right statement should be “Does Volkswagen’s Chief wants to meet Badawi at the first place?”

Industry sources said talks between Volkswagen and the Malaysian government had been bogged down over several issues, including Volkswagen’s reluctance to assume Proton’s debts. Could this be the main obstable with Peugeot earlier on? I bet it is one of the factors. I mentioned one of the factors here because I’m pretty sure the Proton management would set some other ridiculous conditions which could not be thought of by developed countries such as German or France (whether you like it or not they are superior to Malaysia mentality).

Proton Chief Executive Syed Zainal Abidin Syed Mohamad Tahir said at the weekend that a decision on Proton’s foreign partner should be made quickly but not hastily. “The main issue is that the government’s and the country’s objectives should be met,” news agency Bernama quoted him as saying. And what are the objectives being set? Getting foreigners to pump in their money to save the inefficient and badly managed Proton after which the German can pack their things off? Ask the German to transfer their Mercedez Benz technology know-how and technical skills into the Proton’s forever inferior-mentality? Even if the foreigner are willing to teach (out of sympathy), the question remains if the Proton is capable to learn and master the skills of producing quality and profitable automobiles.

French car maker France’s PSA Peugeot-Citroen (EPA : UG) had also explored a tie-up with Proton before calling off the talks last month, saying it was not economically viable to co-produce cars with the Malaysian company. Chances are the conditions set by Proton are being re-used and presented on the table for both Peugeot and Volkswagen. Proton stock price closed down 1.5 percent at 6.55 ringgit.

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