“If Harley-Davidson was unsuccessful and ended up losing more money than Proton within a year and if Mercedes-AMG is also unsuccessful, what chance would Proton have if it had retained Augusta?”
Lim Sian See
One of the issues that Mahathir used to attack Pak Lah on was the sale of the motorcycle company MV Augusta for one Euro back in Dec 2005.
Proton under Mahathir then had purchased MV Augusta just a year earlier in Dec 2004 for 70mil euros (RM367.68mil then) and a further RM142.66mil was pumped by Proton into Augusta for recapitalization.
Mahathir then fell-out with Pak Lah and just a year after buying Augusta, Proton sold for one Euro and incurred RM510mil of loss.
In typical opportunistic fashion, DAP led by Lim Kit Siang sided with Mahathir and slammed Pak Lah for the sale of Augusta.
However, this one Euro sale by Proton is misleading as the buyer also had to incur 232mil euro (RM1.3 billion then) in debt owed by Augusta. Basically, Proton’s “1 euro” sale then was a move to cut-losses in view of impending disaster.
Since then, the company who bought Augusta from Proton had paid off some of the 232mil Euro in debt by selling off some assets and on July 11, 2008, the world’s most famous motorcycle company Harley-Davidson bought Augusta for 70mil Euro – the same price that Proton paid for Augusta but with less debt outstanding.
Just a little over a year later, Harley-Davidson tak boleh tahan and on October 15, 2009, Harley sold the company again for (also) one Euro but worse, also had to pay the buyer 20mil Euros to take over the heavy loss-making company.
Harley-Davidson takes a beating on MV Agusta
Augusta continued making huge losses and on October 31, 2014, Mercedes-AMG bought a 25% stake in Augusta for an undisclosed sum.
However, Augusta continued to post huge losses and in less than 17 months after Mercedes’s entry, production has ceased and Augusta filed for bankruptcy in March 2016.
Since then, no bikes have been produced and Augusta was then bought by a venture company called Black Ocean in Nov 2016. http://www.roadracingworld.com/…/mv-agusta-recapitalized-b…/
In July 2017, it was reported that some Russian investors have agreed to put in money to recapitalise and re-start production but firm plans have yet to be announced.
If Harley-Davidson was unsuccessful and ended up losing more money than Proton within a year and if Mercedes-AMG is also unsuccessful, what chance would Proton have if it had retained Augusta?
If we had listened to Mahathir then (who already cost Proton RM510mil losses on Augusta within a year) or to DAP then, Proton could very well have ended up losing untold billions if it had stubbornly held on to Augusta.
History has proven Pak Lah correct and Mahathir/DAP wrong.