Twist Again?

Proton caught unaware - The Star, 14th Jan 2006

• Proton Holdings Bhd was surprised by Volkswagen AG's decision to abort plans for an alliance with the national carmaker but investors turned cautious on the stock and sent Proton's share to its lowest level in over four years.
• Bernama reports that Volkswagen's plans to relegate Proton into a mass assembler of completely-knocked-down Volkswagen cars and its insistence on taking a controlling stake in the national carmaker have wrecked plans for the two automakers to strike a strategic tie up, quoting people familiar with the negotiations.
• “It was simply not acceptable to Proton to be downgraded from being a full-fledged auto manufacturer to a mere assembler of Volkswagen cars.
• “This would have meant the end of Malaysia's ability to develop and manufacture cars,” said an investment banker.
• The investment banker said that over time, it became apparent Volkswagen wanted to exercise control over Proton, including the running of its finance, management, product development and manufacturing operations.

That was in January 2006 and what is it now?

Decision on foreign partner for Proton within three months - The Star, 10th Nov 2006

• The Malaysian government is in talks with foreign car makers, including Germany's Volkswagen AG and Peugeot SA of France, about possibly selling a stake in national automaker Proton Holdings Bhd., an official said Friday.
• "We've been open-minded and we've been talking to many parties,'' Nor Mohamed Yakcop, Malaysia's junior finance minister, told reporters.
• "If it's necessary to bring a foreign partner, we will bring in a foreign partner,'' he said. "Within three months, we will come back with something more.''

Govt okays 51% sale of Proton manufacturing - TheEdgeDaily, 8th Nov 2006

• The government is believed to have finally decided on giving foreign parties 51% control in the manufacturing operations of Proton Holdings Bhd, with German carmaker Volkswagen AG being mentioned as a potential partner, a source said.

Patriotism is dispensable and circumstantial. Now, it is OK to relegate Proton, let foreign company exercise control over local company, including the running of its finance, management, product development and manufacturing operations for the sake of survival. The twist is just so, Malaysia.