Proton Holdings Bhd’s board has decided not to renew Tengku Tan Sri Mahaleel Tengku Ariff’s chief executive officer contract which expired September 30.

Mahaleel had been in Proton since 1996 when he joined as vice chairman for strategy and operations. Then, he was appointed CEO of Perusahaan Otomobil Nasional Sdn Bhd and subsequently as group CEO of Proton Holdings Bhd in April 1997.

Proton chairman Datuk Mohamed Azlan announced the decision today after it’s board meeting in a press conference in Shah Alam.

Tengku Mahaleel

With effect from tomorrow, Tengku Mahaleel will be put on leave until the end of his tenure on September 30th.

Datuk Azlan said the decision was not because the board was unhappy with his performance, but it is just a case of not renewing his contract.

The board had resolved to make changes to the management structure and leadership of Proton.

Datuk Azlan said:

Proton is an institution and not about individuals. We have many capable people within the organisation and, as you can see, we decided to appoint two of the senior staff to be joint chief operational officers. Its about setting the platform, its about succession.

To perform the functions of CEO temporarily, a four-member exco comprising of two Proton board members and two senior management representatives was formed. The members are chairman Datuk Azlan, Proton director of operations Datuk Kisai Rahmat, Proton director Badrul Feisal Abdul Rahim, and Proton Tanjung Malim chief executive officer Datuk Kamarulzaman Darus.

L-R: Datuk Kamarulzaman Darus, Datuk Kisai Rahmat

Malaysia former Prime Minister Tun Dr Mahathir Mohamad would stay on as special advisor.

Proton is looking for a new CEO, preferably with an engineering background, but it is not a requirement. Both Kisai and Kamarulzaman have Bachelor Degrees in Mechanical Engineering.

Toyota’s head man was an engineering/manufacturing person and look where he has brought Toyota. Hopefully this will bring some good change to Proton. Could it be a Mat Salleh?

Whoever replaces him, Tengku Mahaleel has had this coming for quite a while already. Although whether it is his fault is debatable, but he is detrimental to Proton’s brand image as a whole. For real true change to happen, he has to go.

On the requirements of the CEO candidates, Datuk Azman said:

It can be from within, it can be from outside. It can be Malaysian, it can be non-Malaysian, it can be female, male; it doesnt matter. Whats important is to clearly understand what are the requirements for the company and, thereafter, to meet those requirements.

Tengku Mahaleel won the Malaysian CEO Of The Year Award in 1999.

I would say that whoever sits in the Proton CEO chair is in for a crazy ride. It would take more than Carlos Ghosn to turn it around. The Nissan head job can be focused entirely on business but Proton’s head has to meddle with a mix of politics and business with the whole thing about Proton being the national car, national pride thing.

If it is from a pure business perspective, Proton could easily slam and sack underperforming suppliers but I doubt it is the case here, where Proton seems to expected to provide Malaysian suppliers with a rice bowl no matter how slacky they are.

If overseas suppliers like factories in Thailand could make it cheaper than suppliers in Malaysia, a business-focused Proton CEO could choose the overseas supplier instead. It makes business sense.

But no, with politics, pride and “national duty” coming part and parcel together with the national car manufacturer, it’s likely the new Proton head will be unable to do that. Proton will be a tough beast to set on the right track!

Source: The Edge Daily