How To Make A Bad Thing Worse (Part 2) - Proton (Again??) & Volkswagen
As reported in The Edge Daily:
Share price of Proton Holdings Bhd fell as much as 19.6% or RM1.25 on Jan 13 in a knee-jerk reaction after Volkswagen (VW) scrapped joint-venture plans to build and sell VW brand cars for the local market. VW chief executive Bernd Pischetsrieder reportedly stated that there were differences in the proposed JV.
“We had a very specific idea how we wanted to proceed there. Unfortunately the Malaysian government, Khazanah (Nasional Bhd) and Proton had different ideas. Therefore what we wanted in the cooperation with Proton will not materialise,” chief executive Bernd Pischetsrieder told investors gathered in Dearborn, Michigan, on Jan 11. VW placed the presentation from a Lehman Brothers event on its investor relations website on Jan 12.
In a Bloomberg newsbite posted on Jan 12:
Proton's spokesman Yusri Yusof said the carmaker had not received formal notice of an end to the investment proposal. ``As of today, we are still waiting for an official reply from Volkswagen,'' said Yusri, based in Shah Alam outside the Malaysian capital, in a phone interview. ``We are caught by surprise by the announcement.''
Now whose fault is that? It is bad enough that the talks have been called off, couldn't both parties have at least parted ways better - like having a joint statement!! Simple PR. It does not look good (particularly for Proton) when the spokesman for Proton had to come out and say that they are still awaiting an official reply from Volkswagen.... when the head of Volkswagen has already spoken at an auto trade show and posted it on a Lehman Brothers investor relations website!!!
No point pointing fingers at Volks or Proton now, both parties are at fault. It is unprofessional to terminate proceedings without laying out how the news/decision should be communicated. Both are long time listed companies, and to commit such a juvenile corporate error may tell us all more about BOTH companies attention to detail (or lack of), and priority on investor relations. It is also pointless for any of the two companies to come out now and explain why - its too late.
Its like a courting couple and suddenly one of them got dumped by the other via SMS - both parties end up looking baaaddd...