Top management executives of GLCs have always been selected by PAP politicians – not based on merit – similar to our Kelong President. Without a day in the private sector, former army generals or civil servants could suddenly become business executives overnight?
Domestically, GLCs hardly face any competition. Their ‘success’ is simply based on favourable legislations by their political master. For example, PAP gifted them with unlimited foreign workers to help lower costs after failing to raise productivity since decades ago.
Or if they are about to drown, just throw them tax dollar lifelines to support, perhaps, rights issues. Should any incompetent scholar eventually fail, use the MSM to mask their incompetence and transfer them to another million-dollar post, eg former NOL CEO Ng Yat Chung.
Ng (below) has been posted to another million-dollar position after sinking NOL last year.
‘Success’ of PAP elites has always been dependent on PAP’s open-leg policy: increasing the foreigner population to increase GDP.
GLCs are unable to survive in the face of market competition because top management are mostly book smart scholars. These book smarties have always been resting on their laurels as the result of success and failure is the same: million-dollar bonuses are assured/no accountability.
A good example is ComfortDelgro whose shares have been sinking fast.
Ride-hailing app Uber and Grab have been in Singapore for at least 3 years. Since 3 years ago, taxi drivers have seen their income decline with many quitting altogether.
Comfort did practically nothing but simply hoped to wait out the competition and prayed for a miracle. While other taxi operators attempted to retain their drivers by at least lowering rental, Comfort continued to squeeze drivers by maintaining its rental. 5 months ago, other taxi operators had enough and decided to tie up with Grab. But Comfort continued to watch its drivers suffer. 😦
Since no miracle happened, Comfort’s only option presently is to negotiate a tie-up with Uber. However, it is in no position to dictate the terms of any potential agreement. At most, a tie up will allow its taxi revenue to decline at a slower rate.
It should not surprise anyone that dinosaurs are found in Comfort’s top management. Former top dinosaur is ex CEO Kua Hong Pak who recently stepped down after turning 73. Taking over Kua was Yang Ban Seng and here’s why no one should expect the former civil servant to work wonders:
Unfortunately, there are other prominent dinosaurs on its board, eg Lim Jit Poh, Ong Ah Heng, etc.
Link to Ong Ah Heng’s comments here.
The fate of Comfort may have already been sealed with these 2 jokers (below) as top management executives.
Gan is a former SAF and President’s scholar.
Ang Wei Neng is a PAP MP who was recently appointed CEO of Comfort’s taxi business.
With former civil servants, scholars and own kakis helming a private sector company, how long can such an organization survive?
GLC NOL did survive for decades but was still ultimately sunk last year – by its inept management. 🙂
Comfort has been profitable because of its monopoly in Singapore. And it was also given pow chiak vehicle inspection and testing (including non vehicle inspection) business, VICOM, whose operating profit is about 30% of revenue.
Despite its merger with Delgro in 2003, as well as other foreign acquisitions along the way, increasing contributions continue to come from its local operations. This confirms it has been making little headway overseas without PAP’s presence.
GLCs are mostly losers when faced with real competition and our scholars make really bad judgements. For example, Singtel overpaid for Australian Optus 16 years ago and shareholders are still paying the price today.
SMRT is a bigger joke. It would have collapsed if PAP had not pumped in more than $2 billion and privatized the company … into Temasek. With the new rail financing framework and bus contracting model, SMRT has morphed into a landlord with super prime properties earning guaranteed rental and advertising income.
GLCs make tons of money via their monopoly. For example, NTUC has achieved high margins for their supermarket operations, unlike in other countries, because there is basically no competition.
In summary, most GLCs have survived by depending on PAP’s grow-population-grow-GDP model; they have never experienced real competition. With former ministers, MPs, civil servants and army generals in top management, GLCs are simply committing hara kiri – in slow motion.
GLCs should not assume their PAP-backed business model can be replicated elsewhere.
Looks like things are about to change and GLCs may soon be buried by disruptive technology.