Mahathir-Najib

Tun Dr Mahathir Mohamed’s ongoing feud with Prime Minister Datuk Seri Najib Razak may inadvertently affect national carmaker Proton’s bid to secure an urgent and much needed RM1.5 billion grant from the government, The Straits Times of Singapore reports.

Proton, apparently struggling with losses of more than RM2.5 billion in the past four years, has reportedly requested the injection of funds from the federal administration. The grant may not come through as a result of the political spat though, with the automaker being seen very much as Tun Mahathir’s pet project.

Tun Mahathir believes that the automaker has a future and a government grant to fund research and development for a new engine will make the firm viable again, but many, including government officials, are not convinced.

“Even if Proton receives a grant, it won’t solve the company’s troubles,” a financial consultant familiar with Proton and the federal administration told the publication.

Press Conference with YABhg Tun Dr Mahathir Mohamad and Dato' Abdul Harith Abdullah

Employees – who are staring at job losses – and parts suppliers, who are struggling as a result of the carmaker’s woes, fear that they may become scapegoats in the ongoing political bickering, the report adds.

“They (employees) and vendors are being asked to choose between Tun Mahathir and the government,” an unnamed senior Proton executive told ST.

Proton has 10,000 employees and the network of vendors and suppliers adds another 30,000 or so people into the equation. While there is widespread respect for Tun Mahathir, “there is a growing sense that he is now a liability,” the executive added.

In a sign that it was tiring of things and was pushing back, the government removed Tun Mahathir from the post of advisor to Petronas two weeks ago. The administration cannot sack Tun Mahathir from Proton, since it is owned by DRB-Hicom.

proton-mahathir

However, with the automaker in dire need of government support and DRB-Hicom also relying heavily on government-awarded business, having Tun Mahathir around may prove to be more of a burden than a benefit.

The automaker has yet to file its latest financial results, but analysts tracking the auto sector say Proton is losing close to RM25 million each month because of interest charges on loans and the financial load on its growing stockpile of unsold cars.

Estimates have it that it has about 30,000 units of unsold cars, or roughly three months’ worth of inventory, based on last year’s sales of 102,175 units.