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August 23, 2005
Flying Without Wings
So they got rid of Ahmad Fuaad Dahlan at loss-making MAS.
But put yourself in Fuaad's shoes for a moment, and tell me how you deal with this:
Investment analysts tracking the company said MAS remains a laggard among Southeast Asian airlines because it is heavily overstaffed and is often required by the government to operate non-profitable routes as part of its role as a national airline."Unless MAS is allowed to operate 100% as a commercial enterprise, a management change won't do much good," said a fund manger with a Malaysian bank. [Wall Street Journal: Steep losses roil Malaysian carrier; subscription required]
You can come out with a three-foot thick manual on GLC transformation for all I care, but if you won't let the CEO cut headcount and unprofitable activities, can you blame the CEO entirely when things fail?
It's not just MAS; many of the larger GLCS are over-staffed and are involved in unprofitable ventures.
Why won't the Government let GLCs "right-size"?
Because the employees we're talking about here are largely Malays - tens of thousands of them in total, if not more.
The GLCs will never be run on a purely commercial basis, because if they were, how are they going to justify the award of contracts to "qualified" Bumiputers companies?
You can't have your cake and eat it too.
Posted by aisehman at August 23, 2005 05:25 PM
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Comments
Our GLCs' business model sound very much like those companies operated under the old communist govt of old Soviet & China. Big, inefficient, overstaff & uncompetitive.
And look where are those companies now. Or for that matter where are the old communist regimes now. Irrelevant & a page of the human history.
Will M'sia goes the way of these govt? Or will the Malay goes the way of these companies in a globally competitive world? Will Hang Tuah's cry sound ever hollow in this modern world?
Where are you? The modern Malay intelligentsia.
Posted by: ck at August 23, 2005 06:27 PM
Our GLCs' business model sound very much like those companies operated under the old communist govt of old Soviet & China. Big, inefficient, overstaff & uncompetitive.
And look where are those companies now. Or for that matter where are the old communist regimes now. Irrelevant & a page of the human history.
Will M'sia goes the way of these govt? Or will the Malay goes the way of these companies in a globally competitive world? Will Hang Tuah's cry sound ever hollow in this modern world?
Where are you? The modern Malay intelligentsia.
Posted by: ck at August 23, 2005 06:29 PM
The readers claim that the bumi has dominant the banking industry, which I agree. And dominate the automobile industry in Malaysia.
Out of 10 anchor banks in Malaysia. Only Hong Leong Bank, PBB and Southern Bank are control by non-bumis.
Again, after Oriental Holding Bhd lost it franchise and dealership of Honda. Hyundai franchise has been acquired by Sime Darby. Only Tan Chong which hold distributorship of Nissan remain under non-bumis.
Actually, it is ridiculous to excluded Government Link company (GLC) on it calculation on 18% ownership. If included GLC. Bumi is control more than 50% of Malaysia economy. All GLC are head by bumis and majority of its staff comprises bumis plus it has the bumis culture.
Other than the two industry highlight by the reader of The Edge. The reader fail to included plantation industry. With the GLC control of Sime Darby, Golden Hope and Guthrie. Bumis actually control the majority of the plantation land in Malaysia.
It just that it yield of the company unable to compete with those control by non-bumis like IOI, KLK and PPBOP. Thus, it's time to improve efficiency and competitiveness rather than improve percentage of ownership.
All the plantation company also have a property development arm to capitalize on the landbank like Sime UEP,I&P and Gutherie Land.
Bumis also control all the free to air TV via Media Prima Bhd. Holding company of TV3.
At one point of time. Bumis control the whole Kuala Lumpur transport system via IntraKota and Park May Bhd. However, both have been acquired by the government due to inefficiency and unable to pay it debt. Again, this is a question of efficiency and not question of ownership.
Posted by: low class country at August 23, 2005 06:50 PM
For a society to be prosperous as a whole, there has to be stability, and stability only comes when people see a better life ahead and a reduction in poverty. This is especially true when poverty is associated with a racial or religious group or country (for example, the US).
The roots of our success as a nation lie in our political stability. While this should not come at the expense of democracy, freedom of expression and transparency, it should certainly have as its goal, the alleviation of poverty.
The fundamental and admirable goal of the NEP was the alleviation of poverty associated with the redistribution of wealth. Most socially liberal people like myself have always leaned in favour of redistribution of wealth.
I have met very few people indeed that really object to the NEP being used to help lift the very poor from the kampung out of poverty and into modern society. However, most people I know object to the NEP as a vehicle for the already well off to get even richer.
Now Sabah has arguably more natural resources than peninsular Malaysia but Umno does not seem to be interested in articulating the equity case for the Kadazans and the other indigenous peoples of Sabah and Sarawak as vehemently as it insists on bumi rights.
If an international panel of eminent sociologists, historians, economists and anthropologists, was formed to examine the bumi case, I sure that they would find it extremely difficult to justify it in the form peddled by Umno.
Indeed the panel might even say that the ethnic Indians and the poor urban Chinese have a better case for affirmative action benefits. Many of the affirmative action schemes have been transformed into racketeering ones with parasitic cronies traveling along the Ali Baba highway to become millionaires.
In consequence, the poor of all ethnic groups are more marginalised than ever. Also, not a few of these schemes have engendered a colossal waste of public funds contributed by taxpayers.
It behooves Umno to realise that other races also exist; that they too aspire to better their standard of living especially the poor non-malay bumis in the interior of Sabah and Sarawak.
Another serious question Umno, or its president Badawi should address is the question of ownership. Umno is still quarrelling that they only have 18 percent of the nation's economic cake.
But they never ask how much is owned by the Brunei, Iban, Kadazan, Kedayan, Orang Sungei, Orang Ulu, etc communities? Did Umno ever give shares to these groups of minority non-malay bumis? For instance, how many scholarships have been given by Petronas to non-malay bumis?
Umno or anyone else, not even a superpower, can stand-alone without depending on others. Umno, like everyone else is only a tiny part of the bigger whole, to which everyone must belong. Don't think that Malaysia belongs to Umno, much less the world.
So Umno, don't be too egoistic, think of others too so that you will get a better and balanced perspective. The world is not about Umno only. It's about every individual that occupies and lives in this world. We are all interdependent. Let's wake up to that reality.
Look at the leaderships both in Sabah and Sarawak. They have all made money for themselves at the expense of the rakyat and Umno continues to condone this. With chief ministers and others who spend millions at casinos - what can we expect?
For Umno Youth to cry for NEP's revival without considering factors like transparency and accountability as its key indicators highlights their moral bankruptcy. Why did they not make the battle against corruption one of their major issues as this would have placed immense pressure on the government to act. Perhaps, the obvious fact remains that you need clean hands to take on such an issue.
What have the Sabahans and the Sarawakians got, the people at the grassroots level? Have their standards even in terms of education improved? We talk so much about Vision 2020 and the Malaysian spirit. The fact remains that unity is only as strong as the weakest link.
With the press under control and the Anti-corruption Agency beholden to the politicians, there is too much selectivity in the way issues are handled. Open up and you will find that there are enough Malaysians who will give you information about all the underground activities that are going on in various government-linked companies.
It is time that Dr Mahathir understands what he had done in providing economic progress without matching this with adequate openness, with regards to checks and balances, and space for democratic exchange.
Unless the government opens up, we will continue to be exploited by the greed of those in the administration. Come on, get real. The world is not only about Malaysia and Umno.
Posted by: where your eye at August 23, 2005 06:52 PM
From time immemorial, people move from place to place for one reason or another. After the formation of nations, the mobility of educated and highly skilled professionals affects nations. Brain drain means large numbers of these people emigrate to another nation.
The government should form a special commission on the movement of educated and highly skilled people to study and monitor their staying, leaving from and returning to the country. A country that has more talents is certainly better than the one without.
For decades, we have broached the subject of brain drain within and outside parliament. Large numbers of educated and highly skilled people leave this country to live and work in another one where pay and conditions are better.
In the beginning, some ministers and civil servants boomed out big words, saying that those who left were not loyal to the country and that their departure was good riddance.
Now, there are some people saying one thing and meaning another in government departments and universities. They mouth meritocracy and talents and yet they are mediocre, feudal and bloody-minded. They talk nine words at once, but they undermine highly skilled people. Hence, it is not surprising that returning scientists experience the delay in immigration clearance.
However, the crux of the matter is finding the factors that determine the mobility of highly skilled people, whether brain drain or the other way.
Because the government imposes racial quota in education and government departments, therefore Singapore and other countries take fortune at the tide. For years, there has been brain drain to our neighbour.
Clearly, there has always been movement of highly skilled people in and out of a country. If there is brain drain from a particular country, it can scarcely develop. On the other hand, if it can keep its talents and successfully attract its skilled citizens to return as well as foreign talents to come, it will prosper.
Posted by: run away from malaysia at August 23, 2005 06:56 PM
Malaysia is already under economic siege. From one end, it is being squeezed out by low-cost mainland Chinese manufacturing that is getting better everyday. From the other hand - countries that used to be peers like Taiwan and South Korea are climbing so far up the value-added ladder in electronics that we now have little hope of catching up.
The poster boy for Malaysia's slow decline in manufacturing is Penang.
This is why I blame the NEP. Some economists have called university education a 'signaling' tool to employers. In other words, an employer doesn't give a hoot about what a graduate has really learnt at university. The degree is seen as a 'signal' that the graduate is a person of higher quality than a person without a degree.
When the government, in its aspiration to make the bumis more competitive in the job market, forces universities to 'manufacture' a targeted number of graduates from a certain race, the whole 'signaling' mechanism breaks down.
Employers now cannot tell if a bumi university graduate is really of quality or if they were just the lucky by product of a quota system.
So, no wonder there are accusations that certain employers are 'racist' - they hire non-bumi grads more than bumi grads. But of course - those non-bumi grads are the only high-quality people that an employer can be sure of.
In the end, the education quota policy hurts the bumis more than the non-bumis. Bumis who would have gone on to university even if there were no quota system are now 'tainted' with the impression that they never deserved it in the first place.
Bumis who would not have gone had there not been the quota system still can't find a job after they graduate. In the meantime, these people have spent so much time and money only to be told they should work as overpaid maids or construction workers.
If we really want to let market forces run, then let meritocracy decide who should get places in our local universities. Everyone and his grandmother has an opinion for or against meritocracy, but here is an example of how non-meritocracy has actually hurt the people it was supposed to help.
The biggest economic threat to Malaysia in the next 20 years is not the rise of China and India. It is the NEP.
Let us see how Badawi positions himself in this case - that is if he is going to take a stand at all.
Otherwise he may go down as the prime minister who started with the most popular vote and ended up as the most unpopular PM.
Posted by: corruption man at August 24, 2005 05:32 AM
We cannot escape from the fact that the brain drain stemming from the lack of meritocracy is a factor to where we are today.
While I digress, our policy of luring Malaysian scientists back seems like a big joke. Time and again, for over 30 years, we overlooked Malaysians with potential because of the ugly race factor. After they made their name overseas, we want them back, offering extraordinary packages.
At times, I felt wrongly treated but gradually, I've taken it as fact of life. Over the years, I felt sorry for my father, a blacksmith for financially supporting my education through his hard work.
I wish to take the courage to voice out this is our 'tanah air' too. We have the right to be treated fairly regardless our skin color, religion or belief. When I studied in secondary school, I gave tuition classes to children from a rich family. I could easily tell them even with my young mind, that wealth has nothing to do with your origin.
During my work experience in Singapore, I found out that every employee in our company came from Malaysia, including our CEO. They had found a place where they could compete on equal grounds.
The real culprit for our foreign labour problem is productivity. Without higher productivity, there is no way one can start to move away from cheap labour. A more productive general economy in specific sectors cannot only afford but also demand higher wages for services including for menial jobs.
However, without higher productivity in general, demand would be lacking and increasing wages would only lead to economic stagnation or destruction of those sectors.
NEP is the biggest drag on productivity in this country. It is the core of problem with subsidies, low labour productivity, low investment in higher productivity activities, addiction to cheap capital and its overemphasis on capital investment.
If you want to go to the crux of it, then the real truth is that our politicians are incapable of solving our productivity problem because of their politics. What that means is that the racial equation of our economy is a drag on its productivity.
Without that productivity, there is no way to end the addiction to foreign labour and the longer the drag is there, the worst the situation becomes just to keep the economy going.
Posted by: car at August 24, 2005 05:37 AM
In Malaysia we have the crony group. They continuously recommend new rules and regulations to be implemented and legalised by their front liners, a.k.a. the government, to squeeze the normal folk of their pennies.
Surprised? I'm not.
The Public Services Department (PSD) and their scholarship awarding criteria is a yearly event. It's an annual drama during which the non-bumi students protest after which the government will intervene and award them PSD scholarships.
Why couldn't these deserving students been given scholarships in the first place? That's a question never answered. The drama will be played out again next year. Same play, different players.
And imagine the horror when it was revealed that of the 12000 Approved Permits (APs) that were awarded in 2003, one single deserving human being in our beloved country was given 6000.
He must be an immensely blessed human being to be granted such a privilege. But hey, the government is not answerable to you or to anyone. Our Barisan Nasional government is not concerned enough to come out and explain why such a privilege was granted to this one person in Malaysia. Never has, never needed to.
And why do we now need to pay extra for a hologram label on our medicine? Who gets to make the contract to supply the hologram?
Why do we keep paying a higher toll for the use of our highways? Where does all the money go?
Why was the Penang Outer Ring Road project given to a company without a background in constructing highways? Along with the privilege to develop prime locations on Penang island?
Why do we have to work harder for a smaller share of the pie?
Why are the privileged ones getting away with criminal acts?
Why are the ministers' children attending international schools instead of national schools?
Why? Because we live in Malaysia, and Malaysia boleh.
Posted by: cool at August 24, 2005 05:47 AM
I guess what they are looking for are GLCs that can go abroad to make money and then come home to subsidize the local contractors. Ultimately its validation of the NEP - whether NEP can produce competitive people and thereby justify welfarism that they have been pounding for 40 years. At the very least, it buys time from criticism and if the effort is not disastrous they can claim 'GLOKAL' - companies that can go overseas and yet still help the local bumis. Its very 'Hang Tuah'-colonial mentality.
Posted by: Bigjoe99 at August 24, 2005 09:18 AM
give them everything .. and the malays will lose all ... at the moment the malays have nothing but political majority ...take that away .....the malays will be slave in their own country ...remember bintang 3... remember 13 may ...how the malays were slaughtered ....that will never happen again...and UMNO will protect the malays ...I will support UMNO ...say what you want about UMNO ..the malays will forever support UMNO ..we will make sure UMNO will prevail ...TAK AKAN MELALYU HILANG DI DUNIA....
Posted by: HIDUPMELAYU at August 24, 2005 09:36 AM
"You can come out with a three-foot thick manual on GLC transformation for all I care, but if you won't let the CEO cut headcount and unprofitable activities, can you blame the CEO entirely when things fail?"
Yes...the guy at the top has to consider what he needs to succeed. If his only way to success is by head cutting (and this is a big IF) and fat trimming then he has to make sure that's possible. If not then resign.
You cannot makan gaji buta and then end up blame the government that your hands are tied. You pay the bugger from JKR to dig a hole. If the government don't supply him a spade then he has to figure out how the hole is going to happen or else find another job.
At the end there is no hole, the fella wants to take a dump (sounds like a Malay proverb somehwere in there) and then says he has no spade.
Sorry, the fella failed, plain and simple. Yes we can consider how to help the next guy succeed or do better and the ability to terminate (divisions and people) may be the answer.
The point however remains that for this individual, he has failed and since he's malay there will be no consequences to this failure. No wonder its easier to make excuses than learn something.
Posted by: Maobi at August 24, 2005 10:54 AM
I think there is a CEO mentality problem here.
How does a CEO picks up a job when he is been offerered the chance?
Does he know what he is dealing with when he agrees to the appointment?
Does he lay down his criterias for achieving the KPI clearly so that he can have full authority to run the org the way he sees fit?
Or does he just take the job & thinking that everything will be a OK come what may. Maybe some compromises here & there plus some abang-adekism?
Or does he think that he would not be blame if he fails the experiments. There will always other postings for people like him.
So in a nutshell, if you cannot take the heat then get out of the kitchen. Don't be a chief chef & then blame all the current problems in the kitchen because of the shits left by your predecessor.
Be a professional. Measure yourself before taking up a challenge that might affect a lot of people. Don't just play play.
Posted by: ck at August 24, 2005 11:46 AM