Ford to sell Mazda stake?

Posted by: Ian Rowley on October 11, 2008

Back in August, I wrote a piece asking if Ford’s woes would mean that it might have to sell off its stake in Mazda. According to reports today in Japan, what was once unthinkable is now on the cards. Today, both Kyodo News and the Nikkei report that Ford is preparing to sell its stake in the Japanese company. The latter reports a Mazda executive has admitted that Ford is considering selling its one-third stake.

One possibility is that Japanese trading company Sumitomo Corp. will acquire the shares. Another possibility is that Tata Motors could make a bid, notes the Nikkei. Separately, Mazda issued a statemennt neither denying or confirming the reports. “We have not announced anything, and nothing has been decided. We have nothing to disclose,” the company noted.

Previously, most analysts believed Ford would cling on to Mazda if at all possible. Even if Ford does sell its stake, it’s unlikely the two would unwind what has been a hugely successful alliance. In addition to jointly operating auto plants in Michigan, Thailand, and China and sharing personnel, Ford and Mazda collaborate on research and development. Over half of the passenger cars developed at Mazda’s Hiroshima R&D hub will end up badged as Fords, says Hirofumi Yokoi, an analyst at consultants CSM Worldwide in Tokyo. That’s up from 14.8% in 2000 and 42% today, as Mazda’s role within the alliance flourishes. Credit Suisse, meanwhile, estimates that Mazda saves over $90 million a year by sharing development costs with Ford. The benefits to Ford, it says, are likely several times greater. If today’s reports are correct, desperate times are forcing desperate measures.

Reader Comments

r bapst

October 11, 2008 3:51 PM

The worlds financial landscape is changing rapidly. We are in a global economy that is rapidly losing buying power due to forced economic conditions. Consolidation/ merger and acquisition are necessary for survival. Ford and GM will eventually have to sell or merge with another stronger company to survive in any form, either way resulting in a new world where what was started in Detroit Michigan 100 years ago is now a gone by era. Japan will emerge as the winner overall in auto production world wide as it would appear now and the Ford and GM nameplates will belong to them. We have only ourselves to blame for not building better cars and of course the unions that drove salary and benefits so high that we were forced to sacrifice quality for union barganing agreements, automation was delayed to accomidate union demands to keep union jobs all the while Japan came over here and just did a better job for less money. Nice outcome!

Jose Ernesto Passos

October 12, 2008 1:05 AM

The USA has made a huge mistake in its history allowing excessive concentration to happen in several industries, in particular the American Auto Industry. Reducing the number of makers is not the solution, but spliting the huge companies is probably the best way out.
Huge companies they do not think they are vulnerable, they do not see competitors coming and taking market share, they don't react fast.
America needs a more diversified Auto industry, that will compete in innovation. America may need to stop importing products in a huge scale, it is time to protect its own producers, it is time to have a national strategy. Globalisation is an idea of the past.

Robert

October 12, 2008 2:22 PM

"Over half the cars... will end up badged as Fords." This is not an accurate statement. The cars developed by Mazda at their R&D facility are often the result of platform collaboration between them and Ford. Mazda's new 2, for example, didn't completely originate from Japan. It started in Germany and then moved to Japan. The new Mazda3 rides a platform that actually started in the U.S., moved to Europe and now is in Japan. It will underpin vehicles on six continents, including North America. Mazda could not have even attempted such a platform without Ford. It's far more complex than just reduced R&D costs.

Mike

October 12, 2008 8:28 PM

It'b better to Ford if Mazda aquire them.

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Jeffrey W. Bowyer

November 18, 2008 8:53 AM

Ford buys shares in Mazda; Ford sells shares in Mazda.

BMW bought British automaker Rover; BMW sold British automaker Rover.

Daimler-Benz bought Chrysler; Daimler-Benz sold Chrysler.

Wake up, people. Hello! Hello! Do you see a pattern here?

WHY WOULD SUPPOSEDLY INTELLIGENT EXECUTIVES MAKE SUCH DUMB ACQUISITIONS ONLY TO SELL THEM A FEW YEARS LATER?
(Answer: Because they were just following orders)

John Doe

November 19, 2008 1:22 AM

Ford has purchased stock in Mazda since 1979 and it was a big plus for Ford till this day with Ford sharing several reliable Mazda platforms.
Ford is only selling Mazda because they need to free up some cash.

I hope the future of the Rotary engine remain's stong

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