New MAS CEO Christoph R. Mueller (inset)
Our obsession with nationality and race often clouds our judgment when they involve government policies, which include putting the best people to helm our government-linked corporations.
THIS is the reality – our Malaysia Airlines is already in the intensive care unit (ICU) and it desperately needs quick and effective treatment to rescue it from deteriorating further. To put it bluntly, it faces certain demise if a good doctor isn’t found in time.
The last thing we want to do is to argue over the nationality, race or religion of the doctor. What matters most is that we need a qualified doctor who is able to perform the surgery competently and fast enough.
Unfortunately, our obsession with nationality and race often clouds our judgment when they involve government policies, which include putting the best people to helm our government-linked corporations.
The presumption that only a Malay is able to safeguard the country and community’s interests, in this case, MAS, has been proven to be a horribly flawed prejudice.
There is no need to presume that CEO-designate Christoph R. Mueller will not be able to do the job simply because he does not hold a Malaysian passport.
I don’t think we need to even bring up again the scandalous decisions of some previous leaders in the national airline which have led to its present dire financial straits.
Mueller has a Herculean task to not only put the books in order, but also to restore the credibility of the airline that lost two aircraft this year, resulting in the loss of 537 innocent lives.
Flight MH17 was shot down by a missile over Ukraine in July, and Flight MH370, which disappeared in March with 239 on board, remains an unsolved mystery.
Consumer confidence must soar again. And this cannot be accomplished with slogans like MH – or Malaysian Hospitality – or by changing the design and colour of the MAS logo. Unnecessary expenditure at a time like this is simply not right.
It bears repeating that MAS, despite the recent tragedies, is a well-regarded airline globally. But the airline needs to focus on improving its performance and offer better services to draw back its customers. This is the real challenge for anyone willing and able to take the hot seat that not many people want.
Mueller, 52, will learn soon enough that he is not taking on the role of an ordinary CEO who only has to worry about pleasing the shareholders.
Make no mistake about it, he has to learn to navigate the political minefields and cleverly find ways to boost the bottom line and engage in cost-cutting measures without upsetting a myriad of interested parties.
Luckily for him, he does not have to spend sleepless nights flying to Third World countries in Africa and South America, with no potential revenue, in the name of South-South cooperation simply on the basis of government-to-government decisions.
I salute the Prime Minister for having the political will to hire Mueller for the job as he has a proven record of turning around ailing airlines. The notion that Khazanah, the national sovereign fund which owns 70% of MAS, has undermined local talents by hiring Mueller is simply ridiculous.
Mueller will start work on Jan 1 and he will also be nominated to the board as a non-executive director. Let’s give him a chance.
Mueller is credited with turning around Ireland’s loss-making national carrier Aer Lingus within a year.
According to reports, Mueller took over as CEO in 2009, when the struggling airline was facing tough competition from low-cost rival Ryanair. He reportedly steered the company through several difficult battles, including fending off a takeover bid from Ryanair itself, and managed to expand the airline’s trans-Atlantic services and reposition it as a more service-oriented carrier.
Likewise, MAS has to fend off stiff competition from low-cost carriers like AirAsia, and at the same time compete with other airlines which fly here, including Emirates, Singapore Airlines and Cathay Pacific.
His biggest headache would be to cut about 6,000 jobs at MAS, which would be an emotional issue with lots of political baggage. There are 22,000 workers in MAS, and many can be expected to run to the politicians, whether in government or opposition, to take up their case.
MAS won’t be the first company to reduce headcount in a difficult business environment but Mueller will need plenty of support from the government to push this through.
According to reports, when he was at the helm of Sabena, Belgium’s national airline, which was also suffering huge losses, jobs had to be cut too. Bitter strikes followed and, in the end, the airline went bankrupt in 2001.
The good news for the German CEO is that most suppliers to MAS are agreeable to have their supply contracts re-negotiated as part of the restructuring exercise. That’s one headache less.
It has been reported that all the current suppliers under the existing MAS can either migrate or be left out once the new company takes over the airline’s operations.
One of the areas that can help MAS save costs is procurement, as it is said that some of MAS’ supply contracts are way above market rates.
These supply contracts are said to make up 30% to 40% of total costs for the airline. Even if renegotiations result in a 10% reduction, that will translate to millions of ringgit in savings.
It is generally believed that some of these contacts with private firms – supposedly with political connections – should not have been signed in the first place.
How Mueller handles these procurement contracts, some seen as unfavourable, would be a test as to whether he can function professionally. There should be no political interference in his decision-making, or preferred vendors that he has to deal with.
Mueller must be given a free hand to run the company and his priorities include combing through expenses that have driven up the costs for MAS.
Let’s not impose the race agenda on him if we want him to succeed in making MAS healthy again. He does not have much time left as the RM6bil pumped in by Khazanah will burn up very fast. Malaysia needs Mueller to succeed.
There is a lesson to learn from the MAS fiasco. We saw the financial burden building up and we kept trying to postpone treatment, pretending that by pumping in more money, it will be enough.
Sadly, it has to take two tragedies for us to wake up to the reality that we need to cure the illness.
Having expatriate CEOs especially in the financial, telecommunications and media sectors is not unusual for most private companies. Why should GLCs be an exception? Not only should the expatriate option be available, but they must also be allowed to draw on the talents of all Malaysians, regardless of ethnicity.
There should only be one criterion – pick good and honest people, regardless of their race or religion, who have the interest of Malaysians at heart.
We have reached a point in the nation’s history when Malaysians are tired of listening to the overplay of racial and religious sentiments, fanned by extremists, to create fear when there are none.
The reality, if we look hard enough, is that the real treacherous actions against the country are by those given high positions but commit criminal breach of trust and corruption for their own benefit.
Having foreign talents is good – can we imagine watching the weekly Barclays Premier League matches with only British footballers playing? What will the live telecasts be like without Alexis Sanchez, Robin Van Persie and Yaya Toure? It will be utterly boring without these colourful, foreign players.
We should lift a quote from the late Chinese leader Deng Xiaoping, who said, “It does not matter whether a cat is black or white, if it catches mice, it is a good cat.”
