Discussion is possible, says Ford CEO on tie-up with Proton

Since the Prime Minister’s remark that up to 30% of Proton’s equity is for sale, there has been much speculation on which carmaker would take up the stake. At the same time, there have been rumours of an ‘American suitor’ which has been talking with Proton in the past year.

The most likely candidate seems to be Ford Motor Company as DaimlerChrysler already has acquired an Asian manufacturer (Mitsubishi) and DC’s CEO Jurgen Shrempp has said that no further acquisitions are being considered, and General Motors has no real historical contact with Proton (although there was also a rumour of it buying over Proton at one time).

According to Ford President and CEO Jac Nasser, the company would be willing to have discussions with Proton if the opportunity arises. Mr Nasser made this remark in response to a question from a member of the Malaysian media in Dearborn, Michigan tonight.

“We recognise that Proton has certain strengths and good points as well as an aggressive marketing strategy,” said Mr Nasser. “They already have Mitsubishi Motors as their partner but we would certainly be willing to have discussions with Proton if the matter is raised.”

Mr Nasser had also earlier said that, in making its acquisitions or mergers, Ford did not wait for a ‘FOR SALE’ sign to be put out before making an approach. In fact, as can be seen with the acquisition of Volvo, Ford initiated the deal because it saw much potential and benefits in having the Swedish carmaker in its group which today includes Land Rover, Aston Martin, Mazda and Jaguar (besides the original Mercury and Lincoln units).

Ford’s interest in Proton could be due to its requirement for a C-class model (the segment occupied by models like the Proton Wira and Ford Lynx), suggested a senior Ford executive. Although Ford has Mazda for development of products for the Asian market, it appears that Mazda’s own longer-term plans focus on a strategy which seeks to re-establish the Japanese brand’s individuality and innovativeness, rather than to develop more compelling mass-market models.

The executive noted that with the Daewoo negotiations having fallen through, Ford would now be reviewing its product development options for Asia and strategic alliances with another carmaker in the region should not be ruled out.

Further evidence of Ford’s interest in Proton can be seen from the remarks made by Gerry Kania, Ford’s President for ASEAN operations, at the recent ASEAN Economic Ministers meeting. Mr Kania’s statements with regard to Malaysia’s extension of two years before opening up its auto sector under AFTA were regarded as ‘rather diplomatic’ according to an industry analyst. In his remarks, he acknowledged that Malaysia’s national car project was a special case and that the Malaysian government’s position was understandable. This statement was in contrast to the more common criticisms made by other manufacturers frustrated by the delay requested by Malaysia.

So are Ford and Proton talking? The question has been raised before and Proton’s reply to the query by the SEC has been that there is nothing specific being discussed. But the rumour is so strong these days that Ford Malaysia MD Richard Canny has been careful not to have his car even pass by the Proton factory in case he is spotted and more fuel is added to the rumour!