In South Korea, Samsung mobile phone is competing fiercely against Nokia.
In Taiwan, one mobile phone brand that competing fiercely against Nokia is BenQ, a unit demerge from Acer Computer. However, unlike Samsung, BenQ market shares outside Taiwan is negligible. To enhance its market shares in Europe. BenQ has acquired Simens's mobile phone unit in German 3 weeks ago. BenQ would allow to used SiemensBenQ brand name for 5 years and only change to BenQ after 5 years.
However, BenQ get a good deal from Siemens. Siemens gives it mobile phone unit to BenQ. Siemens has to take over all the debt previously incurred by its mobile phone unit amounted to 500 million Euro. In addition, Siemens have to spend 50million Euro subscribe to new shares issue by the merge unit and provide 250million Euro to the new company for R&D, brand building etc.
In total, Siemens never get a single sen when disposed off its mobile phone unit but have to pay additional 300 million Euro to the new company, other than taken over the 500 million Euro debts!!!
In return, BenQ agreed that it would not retrench any staff or do any pay cut on previous Siemens's staff in German within one year.
Some said this is a bad deal as BenQ has taken over a loss unit but unable to do any cost cutting measure like pay cut or retrenchment. But if you compare this deal with China's company. Like Chinese oil company CNOOC Ltd to acquire Unocal Corp (USD18.6bil), HaierÂ’s offer to buy Maytag Corp for US$1.275bil and Renove aquired IBM personal computer business for US$1.75bil.Taiwaneses company has a better deal comparatively.
Now, back to Proton in Malaysia. Proton need to have a foreign technical partner urgently. It is in negotiation with German's Volkswagen now. However, I feel Volkswagen not that competitive compare to Merces and BMW in it own country. Its most competitive advantage is it has penetrate and dominant China market.
Mitsubishi group desperately want to dispose off it automobile unit like Simens with it mobile handphone unit. Proton acquired Lotus in UK before. Its Gen2 engine develop base on Lotus's technologyy is not well received. It is difficult for Proton to swallow Mitsubishi's automobile unit previously. But if Proton able to negotiate a deal base on BenQ-Simens model. I feel it is good for Proton and Malaysia.
Base on the experience Carlos Ghosn of French's Renault group turnaround Nissan. He stated that Japenese company have to buy its component from its related company under the same group, even at higher price. If we source the component from an outsider, there is a lot of price reduction can be done. Mitsubishi group has much larger internal group of component supplier.
Further Japanese company also has a lot of cross holding. Nissan hold a lot of 5% to 10% shares in other company. Like Mitshubishi also hold Proton's shares at some point of time. By disposing some of its shares in this inter-company holding. Nissan able to raise a lot of cash
Its really sad to see the recent event happen between Proton's CEO and the government. Actually, one weakness of bumiputraa involve in business is there operate a business organizationn like a political party. With a lot of poison pen letter circulting around. Even Proton adviser'ss Dr Mahathir also cannot stand it. Bumiputra have to change their "political animal" attitude if they want to succeed in business.
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