PRIME MINISTER LAUNCHES NEW PROTON PERDANA, SIGNALS END TO TUN MAHATHIR’S ERA OF POLITICAL INTERFERENCE

Earlier today, at a ceremony in Putrajaya, Prime Minister Najib Tun Razak launched a new model of the Proton Perdana. Describing this as the start of a new chapter in the company’s history, the Prime Minister expressed his desire to see Proton embark on a new era of innovation and growth, free of political interference.

Noting that the Government had approved a loan of RM1.5 billion to Proton Holdings in April, the Prime Minister reiterated his commitment to protect the company’s workers and suppliers, but made clear that he expected Proton to address structural flaws within the company. He said:

“The urgent need for the cash injection laid bare the fact that there are serious structural flaws within Proton.

“Some of these go back a long way. The question has been asked if the business model was flawed from the start. Malaysia, some said, was not a large enough market for a national car manufacturer.

“Proton flourished, yes, but only due to a very high level of Government help. Our car industry grew under the umbrella of protectionism, with quotas on engine sizes and Malaysians paying high import duties on foreign cars.”

There was a belief, said the Prime Minister, that Proton could do anything because the Government would always back it:

“There has been too much political interference in Proton’s strategy, management – including of personnel – and business model.

“We saw the results of that early this year. A manufacturer which should be a source of national pride was facing a very difficult situation.”

The Government stepped in, the Prime Minister said:

“To protect Malaysian jobs, to protect Malaysian families who rely on Proton, and to protect the company’s business partners’ income and livelihoods. We will never fail to support Malaysian workers and suppliers. We will always fight to ensure that no one is left behind.

“Now, I am pleased to say, there have been significant changes at the top levels of Proton. Tun Mahathir’s era of political interference has come to an end.”

Going forward, the Prime Minister stressed that Proton needs to ensure it has a sustainable business model and immediately identify a strategic foreign partner. He said:

“The Government is more than willing to work hand in hand with the private sector to promote enterprise, development and the growth of Malaysian businesses.

“But if the Government supports industries and companies, there have to be results. We cannot put the people’s money into ventures that cannot support themselves.”

PRIME MINISTER’S OFFICE
14 June 2016