By on August 24, 2012

Today, the last Mazda6 will “roll off the assembly line in Flat Rock today as the Japanese automaker hands the keys to the plant back to its one-time parent, Ford Motor Co.,” says the Detroit News. It is part of a sad and messy affair that makes Ford look stupid and vindictive.

The AutoAlliance International plant has been run as a joint venture between Ford and Mazda since 1992. Officially, the plant remains a 50-50 joint venture between the two automakers while both are looking into a final dissolution. Ford spokesman Todd Nissen: “We continue to study various possibilities for the future of AAI, but we don’t have anything to announce at this time.”  The next-generation Mazda6 will be built in Japan.

Ford had bought a small stake in Mazda in 1979, and increased its holdings until Ford was Mazda’s largest shareholder and effectively controlled the company. Ford and Mazda shared plants and platforms throughout the world.

“When the financial crisis struck the auto industry in 2008, CEO Alan Mulally believed Ford’s engineers were using Mazda as a crutch,” says the DetN. More importantly, Ford’s shares of Mazda “were one of the few things Ford could still sell after mortgaging almost everything else to finance Mulally’s restructuring plan.” Ford reduced its 33.4 percent of Mazda to 13 percent in 2008, and cut the remainder down to a symbolic three percent in 2010. Sumitomo group firms and other companies with which Mazda enjoys close business ties were the buyers.

The formerly amicable relationship between Ford and Mazda quickly turned hostile after the first chunk of shares was turned into badly needed cash. If an executive from Ford wanted to attend a meeting at Mazda, the matters discussed had to be carefully vetted beforehand and signed-off in advance.

Former Japan-insider Ford turned into an enemy of Japan. Ford is a ringleader in the new rounds of Japan-bashing, it financed the embarrassing new “study” of the American Automotive Policy Council, which repeated old charges of a closed Japanese market, and of imperiled American jobs. Hopefully, Ford did not pay too much for the study. It was a re-release of old fiction, a sloppy re-hash of old lies without new proof.

As the former manager of a Japanese car company, Ford has intimate knowledge of Japanese business practices. If Ford can’t come up with proof to back up its embarrassing and childish allegations, we can safely assume that there is none.  Mazda, which has most of its production in Japan, is worst-hit by the obscenely high yen, and must mutter choice Japanese invectives when Ford’s executives or presumptive researchers paid by Ford tell their crude lies about Japanese currency manipulation. If there is one Japanese car company that could need a free trade pact between Japan and America, then it’s Mazda. Its estranged mother Ford is against it.

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74 Comments on “Mazda Says Sayonara To Flat Rock, Good Riddance To Ford...”


  • avatar
    psarhjinian

    Pity, because American-made Mazdas were less likely to rust.

  • avatar
    DeadWeight

    This is a good car. I’d choose it over a Camry, Accord or Altima all day long. It feels more ‘German’ than of its peer group, but you get as good or better reliability with it than its peers.

    It struck the happiest medium between being fun to drive and large and comfortable in its respective segment of all the contenders. In fact, it was the sportiest feeling family sedan while also being at least as comfortable to drive as the Accord.

    It totally flopped in the American marketplace from a sales point-of-view as many good cars do. A lack of marketing and Mazda’s relatively small footprint doesn’t do Mazda any favors in trying to push a true volume car in the United States.

    • 0 avatar
      Speed Spaniel

      Agree, it is a good car. It’s lack of success is puzzling, but I think it’s unpopularity is also due to it’s looks. It’s a tad bloated and bland looking. I think had Mazda done better with the exterior execution it might have steered people away from the Camry and Accord, pretty much like the Sonata has. If you’re going to do ‘bland’, you might as well choose a Camcord.

    • 0 avatar
      psarhjinian

      It had a few problems:
      * Fuel economy was poor: the four was within striking range, real-world, of Honda, Toyota and Nissan’s V6 offerings.
      * It was noisy (mind you, so is the Accord, but the Accord has better seating and headroom)
      * It really isn’t that much fun to drive. The Camry SE was more extreme.

      I like the 6, but let’s be honest, it’s not that exciting to drive for the class.

    • 0 avatar
      tbp0701

      I test drove the 6 along with several other cars. While impressed, I preferred the 3 for feel and responsiveness, as well as the new, more efficient engine. Mazda also offers several versions of the 3 with a manual transmission but only the base 6 has one available, which was a major factor for me. (I recently bought a 3, choosing it over considerably more expensive cars like the TSX, 328i, G37, Sonata and Accord.)

      As for Ford, like many I’ve been impressed with what the company has been able to do over the last few years but I’ve wondered how much of it was based on the ideas and expertise of Mazda and Volvo, among others. It’ll be interesting to see if Ford can be as impressive on its own.

      • 0 avatar
        snakebit

        It’s a shame that the new 6 is being introduced just as Flat Rock is losing the last version. I’m on my second 3-Series, but I’m always watching what’s happening with C-Class cars like Mazda3, Impreza, and Golf/GTI The Mazda3 is a homerun, to me, but its sales can’t support Mazda in the US, unfortunately.

    • 0 avatar
      TTACFanatic

      The problem with the current Mazda 6 is that it was too far removed from the first generation Mazda 6.

      The 1st gen was a critical success but not a sales success. The 2nd gen got bigger and heavier (with somewhat questionable styling) following the Camcord, critics didn’t like the changes and neither did anyone that owned a 1st gen.

      • 0 avatar
        DeadWeight

        I agree with you that the last gen 6 handled better and was more nimble, but that didn’t translate well for Mazda, since it wasn’t class competitive in terms of NVH or interior room.

        By making the 6 class competitive in terms of NVH and size with the CamCord crowd, Mazda lost the prior 6 loyalists, but didn’t steal any CamCord owners.

        It was really a no-win situation.

        Whoever mentioned fuel economy as an issue, I don’t know if you’re speaking of the V6 (which is thirsty) or the 2.5 liter 4, but the 2.5 liter is easily capable of averaging 25 mpg overall (30+ on the highway and 21+ around town) which isn’t exactly terrible.

        I do know that cruising at 70 in 5th gear easily yields 30+ mpg, which isn’t bad at all for such a large vehicle.

      • 0 avatar
        kvndoom

        As a former 2006 owner, I couldn’t agree more. The second I saw that the MT was only for the stripper model, this car was dead to me.

      • 0 avatar
        tuffjuff

        The Mazda 6 V6 had terrible fuel consumption, if I’m not mistaken it was something like 26 or 27 highway.

        Even the Chrysler 300, which is much heavier, had gotten 28 or 29 highway before introduction of the 8 speed.

      • 0 avatar
        TTACFanatic

        I think if the 3rd gen can correct what the 2nd gen got wrong (i.e. a little lighter, and a little tighter) with what I hope will be a 2.5 L sky activ engine popping out 200+ HP, it will again be a critical darling.

        And with the presumed death of the Acura TSX it might be able to get some conquest buyers.

      • 0 avatar
        bball40dtw

        So the presumed death of the TSX will give Mazda how many comquest sales? 14?

    • 0 avatar
      newsie23

      When I first saw the ‘pre hatch back/wagon’ models at the Detroit Auto Show – I was excited! I owned a V6, MT, 95 Contour SE, bought for 1/2 list, with 43k km, and was ready for an equivalent wagon, with a sun roof. I ‘argued’ with the man in the booth, about wanting a sun roof, w/o a black, leather interior (it turns out, that the ceiling panel, with a sun roof is beige, but beige wasn’t available for the seats, etc., with a sunroof! I told him that, I have been in police cars and cabs, with better leather! This spring, I finally bought ‘my’ 05 MT Mazda6 wagon – and love it – except for the black (uncomfortable/badly maintained, for me) seats. (I am not a cow hugger, but am lazy – to properly, maintain leather).

      Normally, I do not buy ‘new’ unless I can buy what I want, w/o ‘packages’ of things, I do not want. Needless to say, I have only bought 3 new vehicles. If I buy ‘off the lot’ – I buy used, and take the closest ‘thing’, I find. Missed out on a dozen or so, New cars!

      I understand why ‘package cars, are offered, but – why are factory orders not allowed, when the choices, really, don’t interfere with ‘other combinations’ whatsoever?

      Mazda has been one of the worst in restricting customers desires. (They all do)

      ??Why?? does ??Ford?? restrict ??colours?? on their premium, gussied up, pick-ups, et al. If the customer wants, and is willing to wait, sell the ‘work truck’ paint to him.

  • avatar
    stephenjmcn

    “Mazda’s CX-5 has been engineered with an unfavorable exchange rate in mind….”

    That means cheaply engineered, right?

    • 0 avatar
      tuffjuff

      This is what I, too, was wondering.

      • 0 avatar
        KixStart

        Cheap? You sure can’t tell from sitting in the base version. Nice engine, although not as much power as some would like (I was satisfied). Slick shifter. Quiet. Decent appeal in the interior, decently equipped. And that’s for the $21,700 unit, spend more you get even nicer. I think the Touring is probably an excellent value.

        Superb fuel economy for the amount of capability you get.

        I was very impressed and couldn’t figure out how they did it for the price.

    • 0 avatar
      stephenjmcn

      @KixStart, that’s almost word-for-word what JB wrote about the B5 Passat. It’s what you can’t see, or feel, that worries me.

    • 0 avatar
      redav

      I recall reading that as a part of SkyActiv, Mazda standardized tooling & parts to make production cheaper & more flexible. The 2.0L gas & 2.2L diesel engine use common parts & are made on the same assembly line. The 6 supposedly will utilize the same assembly tools as the CX-5.

      They said they had planned for the high yen & would still be able to make a profit making the cars in Japan. I don’t know how, but it seems to be working.

  • avatar
    CJinSD

    Does the rotary e-shift come with steering wheel paddles for selecting and holding gears? Is this pickup really a Dodge? I thought some marketing genius decided the trucks were just Rams now.

  • avatar
    mike978

    It does look vindictive of Ford. It was a big error of Mulally to sell the Mazda shares. It didn`t raise that much money and they engineered some good platforms between them.

    I thought the new Mazda 6 was being unveiled at the Moscow auto show today, any news on that? I ask since if it is as good as the teasers show as well as building on Mazda strengths like driving dynamics, reliability and value then it could be a hit for them and do much better than the current 6 does.

    • 0 avatar
      Robert.Walter

      Problem was Mazda’s overlap with Ford of Europe’s engineering capacity and capability. FoE is recognized for its driving dynamics, so in the One Ford world, NAAO doesn’t need to get its small and medium car designs from Japan, when it can get them from FoE.

      This simplifies everything by reducing redundancies without terribly reducing economies of scale (actually increases them in some ways.)

  • avatar
    onyxtape

    We had a 2002 Tribute built at a Ford plant in Kansas (or was it Missouri?) What a piece of crap – both before and after warranty.

    We’ve had much better luck and fun from our dearly-departed MPV and 3.

  • avatar
    CJinSD

    So how long before the Fusion stops being a Mazda in drag and starts being as dependable as everything else Ford sells? Those good consumer scores must have rubbed all of Ford’s own product teams raw.

    • 0 avatar
      tresmonos

      CD3 had a lot of in house NA design groups. It was a joint effort. It will be interesting to see how CD4 (FoE/FNA) stacks up, though.

      • 0 avatar
        L'avventura

        The CD3 was a complete Mazda design.

        It was first introduced in 2002 as the GG platform in the Mazda 6. The GG was an evolution of the Mazda GF.

        The same platform was not introduced in Ford, Lincoln, or Mercury until 2006 in the Fusion/Milan/MKZ and a year later in the CX9/Edge/MKX. 4 years is near a life-time(model cycle) in car terms.

        Let’s also consider that when the GG/CD3 platform was being developed in the late-90s/early-2000s. US gas prices were at its lowest, Ford was raking in money in SUV/light truck.

        The family sedan market was a low-margin market segment that was pretty much pushed to the side by Ford. The North American side of Ford focused their resources on high-margin vehicles (which is why Ford really didn’t have a competitive car in the segment until the Fusion).

        The next CD4 is based on the EUCD platform. Which is based on the C1 platform. The C1 WAS a joint effort between Ford’s European arm, Volvo, and Mazda. But for that platform large credit should be given to Ford’s “C Technologies Program” in Cologne, Germany.

      • 0 avatar
        tresmonos

        you’re correct in initial development. The Ford NA platforms took the ‘base’ and developed ‘from’ it.

        Calling a CD337/338 a complete Mazda design would be incorrect. Mazda had no hand in it sans the chassis ‘hard points’ (which were inevitably modified). Wikipedia is great, isn’t it?

        Edit: coming from experience, I haven’t seen any Mazda influence from the D&R’s down to Manufacturing. I could be incorrect.

      • 0 avatar
        L'avventura

        @tresmonos

        To somehow say this is a joint platform is giving Ford too much credit to something they had no hand in. Yes, obviously, it has been modified over the last decade (including Ford). But it is a Mazda platform, and most of its development has been a Mazda effort.

        If you want history. Back in 1993, Mazda made three development centres in an effort to chase Toyota, this created too many models and platforms at Mazda and caused them fiscal distress (which later resulted with Ford buying a controlling stake in Mazda)

        In July 1995, Mazda reduced development centers & platforms to two. One for sports cars and the other for a sedan platforms. This is where the GF platform started development for the Mk5 626.

        In 1996, Ford’s Henry Wallace was appointed as Mazda CEO. Much of the development of what we know now as the CD3 was a push Wallace did at Mazda back into matrix structures for car platforms. The GF became the GG. And was the start of the platform sharing effort between Ford-Mazda.

        Its only with the Fusion, which launched in 2006, that Ford even started touching this platform. Its a platform that has been constantly evolving and being modified for a very long time before Ford had any involvement.

      • 0 avatar
        tresmonos

        ‘Joint’ was a poor choice of words. My apologies, L’avventura.

        2006 is when Ford needed return on their investment. Now that they no longer need a partner to develop platforms, we see this ugly divorce.

        Mazda specific evolution in Ford CD3 stopped in 2006. Upon creation of a Ford specific program, mother bird Mazda sends them off on their own. Sure, you have the aggregate ‘pool’ of shared parts, but the warranty/continuous development is in a global pool. Seeing the scale of usage and sales, one can say Ford contributed to the evolution of the platform in a much bigger way than Mazda after adoption. But now we’re talking about minutia of the entire part percentage of each specific program.

        My point was to say that the Ford CD isn’t as Mazda as CJinSD would like to believe.

    • 0 avatar
      TTACFanatic

      The new Fusion (Aston-ish) is based on the EUCD/CD4 aka Ford Mondeo. So we could have the revenge of the Contour or a smashing success. The biggest problem with the Contour was the Euro-sized interior, but who would build a mid-sized sedan with a smaller back seat than its predecessor … that would be crazy.

  • avatar
    morbo

    Never quite understood. Was the 6 really a Fusion in drag? Were they truly co-developed? Were they both derivative of the Ford Mondeo? I’ve been in a 6 and Fusion, and bought a Fusion for a family member. They seem very similar to me.

    • 0 avatar
      TTACFanatic

      Other way around. The Fusion/Milan/Zephyr/MKZ were based on the Mazda 6. You have to remember that during the 00’s Ford of North America didn’t really feel like making cars.

      The Focus was developed by Ford Eurpoe/Volvo/Mazda
      The Taurus was left to die on the vine.
      The Five Hundred was a Volvo underneath.
      and Finally you have the Fusion.

  • avatar
    rpol35

    “The formerly amicable relationship between Ford and Mazda quickly turned hostile after the first chunk of shares was turned into badly needed cash.”

    So what, it’s a business decision. Ford was fighting for its survival in 2008 and they took whatever action was deemed necessary, including the sale of their interest in Mazda, to survive. They hocked everything, including their blue oval and their headquarters building; selling stock that they hold in another company to raise cash is a given in such a situation.

    Had it not been for the Ford connection, I wonder if Mazda would have lasted to this point; at least as a meaningful market participant. As a Japanese player, their market share has been continuiously trounced by the “Big Three”; Toyota, Honda and Nissan. Had Mazda been more competitive on their own, they wouldn’t have needed Ford then and wouldn’t need “a free trade pact between Japan and America” now.

    Sounds like sour grapes to me.

    • 0 avatar
      True_Blue

      My thoughts and feelings exactly. Ford didn’t need Mazda in 2008 as much as Mazda needed Ford in the 1980s, Ford sells shares for survival, companies effectively divorce (although I was told recently I can still get A-plan on Mazdas), both companies move forth. With the CD4 platform debuting, we’ll see how good the global architecture actually is.

      As for the CX-5, I test drove one (hence the A-plan alert) – it’s not bad (lacking grunt), but compared to it’s step-sister, the ’13 Escape, it feels a half-generation behind. They’re selling like hotcakes though.

      • 0 avatar
        dvdlgh

        I had an 85 626 LX Touring Sedan (actually a 5 dr hatch) 4 cyl/5 sp MT with the digital dash. Fantastic car, beautiful design, much better looking than the Taurus which copied the Audi 5000 design. The build quality and reliability were years ahead of the Taurus, too. After Ford screwed up Mazda in the 90’s I never got another one. I regret selling that car but that’s the way it goes sometimes.

  • avatar
    dave504

    Japan has one of the most closed auto markets on the face of the earth, despite the usual TTAC lies and water-carrying for Japan. It amazes me how TTAC has allegedly “debunked” this by pointing to their own lies and half-truths without addressing the fact that low tariffs and regulation means absolutely nothing when you can’t open your own dealership and have to be “represented” (with zero marketing) by an existing dealer.

    http://www.ft.com/cms/s/0/f848b2a6-9f65-11e1-a255-00144feabdc0.html

    I’ll take the word of the Financial Times over the lies of TTAC any day. The perpetual America-bashing is getting old.

    • 0 avatar

      You are not taking the word of the FT. You are citing an opinion piece, written by the president of a DC lobbying group.

      Op-ed piece by By Clyde Prestowitz

      “The writer is president of the Economic Strategy Institute in Washington”

      Tweet by Matt Blunt: “The Economic Strategy Institute & @clydeprestowitz say including Japan in #TPP would mean less #jobs for U.S. workers http://bit.ly/Qf7s1Q”

      Executives of the D3 served on ESI’s board.

      Chrysler, GM, and Ford are listed as ESI donors.

      And where did you find the “you can’t open your own dealership and have to be “represented” (with zero marketing) by an existing dealer?” Not true. Even the paid lobbyist Prestowitz does not stoop so low. He says:

      “Then there is the dealership structure. To sell cars, a manufacturer has to find dealers who will sell its cars. In markets such as the US, dealers are independent and free to sell whatever models they wish. This makes it relatively easy for new market entrants to find dealers. In Japan, however, the dealers are owned or controlled by the makers. They sell only the cars from a particular maker and do not represent any outsiders. Of course, a newcomer such as Hyundai can try to rent or buy land and establish its own new dealers, but in a country of limited property space and sky high prices this is a slow and expensive process.”

      I am in tears. To open a dealership, you need land.

      • 0 avatar
        MeaCulpa

        I would like to add that by the same logic – it’s hard to get land – NYC, London, Stockholm, Paris and a host of other cities are closed markets as land is dear. That’s without going into Islands like say, oh I don’t know, Hawaii where land is dear and your shipping options are limited (in the case of Hawaii this should actually hurt domestic manufacturers if they ship form the US as the Jones act makes it pretty much illegal for foreign companies or foreign built vessels to compete).

    • 0 avatar
      mike978

      Interesting article link. I see the author was a member of the Reagan administration and studied in Japan (amongst other places) so he seems credible. I had trusted Bertel’s take on this issue since he is experienced in both the auto industry and Japan.

    • 0 avatar
      L'avventura

      Er.. Dave, that’s an Op-Ed piece by Clyde Prestowitz. Its not the FT. Prestowitz is a well-known/outspoken individual whose opinions should be taken with a perspective of where he comes from and who he is.

      Moreover, Prestowitz is a relic of Reagan-era thinking towards Japan. He’s a purveyor of old 80s-myths that furnishes old stereotypes. He’s article is horribly inaccurate to begin with.

      The fact that he uses Hyundai’s lack of success in Japan as his main focal point, is perhaps his weakest argument, and a sign that this man has no clue about the Japanese automarket.

      The Japanese market is kei, hybrids, and B-segment cars. In that order. Those are the cars that Japanese buy.

      He is right about the importance of the dealer network in Japan. Land is expensive, and setting up dealers are crucial and expensive, BUT as most foreign makers don’t build small compact hybrids or 660cc keis its an expensive endeavour to operate in the Japanese market. And its a cut-throat competitive market. Fact is, foreign companies haven’t INVESTED; build cars that Japanese like, built the dealer network, and really competed for the Japanese purchase.

      BUT let’s consider, foreign companies that have invested and now have a massive presence in Japan. The Apple iPhone & Samsung Galaxy are receptively the top 2 selling phones in Japan. Japan’s largest sushi chain is owned by a London based company. Bain Capital (the company Mitt Romney co-founded) now owns the largest family restaurant chain & TV shopping network in Japan (Skylark and Jupiter). Walmart owns over 400 retail outlets in Japan. Same goes for a lot of American clothing companies.

      Bertel is spot-on. Japan is an open market. There are tons more examples of foreign industry absolutely dominating the Japanese domestic market. But you just have to build products that are in line with unique Japanese tastes and sell them through proper channels.

      None of those issues are actually addressed by Prestowitz.

    • 0 avatar
      bumpy ii

      I’m particularly impressed by the wholly imaginary Chrysler/Jeep dealership I saw in a Toyota Aqua video.

  • avatar
    tresmonos

    “It is part of a sad and messy affair that makes Ford look stupid and vindictive.”

    So opening up possible overflow production capacity for a top selling nameplate (Hermosillo is at capacity) is stupid?

    The new CD4 platform is global Ford. CD3 is dead. It’s a casualty of the evolution of business. I’m rooting for Mazda, but overhead doesn’t come easy.
    While I agree the free trade study is propoganda that confuses anyone with decent intellect, your article spews just about as much bias. It would be interesting to know what drives your angle, but I’ll most likely never know.

  • avatar
    Conslaw

    When I was testing cars a few years back, the Mazda6 was immediately knocked off my list because it didn’t have folding side mirrors. It’s a seemingly small point but when you have a tight garage, it’s important. Other than that, the decontenting in the Mazda6 was apparent compared to the Mazda3.

    • 0 avatar
      DeadWeight

      How was the Mazda 6 “decontented?”

      Comparing the prior generation 6 (2008 or older) to the 2009+ model was about as big a change, in the UP-CONTENTING, as any two successive same model cars I can ever recall.

      The 2009+ was much larger, had better fit and finish, a higher grade of interior materials and way more features standard or optional than its predecessor.

    • 0 avatar
      dvdlgh

      Sounds more like a garden shed.

  • avatar
    BrianL

    AAPC didn’t do the study. CAR did. You have made the same wrong claim twice in three days.

    Bertel did you read the document that was referenced in the CAR study? The one that talks about the barriers in Japan? I tried post the title of it twice, but the system wouldn’t let me post it.

    Besides, Japan pretty much is a closed market considering how little non Japanese brand imports sell there. Over 2 million cars sold this year in Japan, VW has 33k so far, and that is the biggest.

    • 0 avatar
      mike978

      You cannot just take volume as an indication of whether it is closed or not. The Japanese market demands types of cars the non-Japanese manufacturers do not make.
      To use your logic if you just looked at the 1/2 ton truck market then America is pretty closed since <10% market share is "foreign".

    • 0 avatar

      I sure did read the purported “study.”

      I did read;

      “CAR also examined the effect of changing exchange rates on Japanese vehicle exports. CAR’s exchange rate model for Japanese vehicle exports estimates that if the real yen/dollar exchange rate changed from a level of 90 yen/dollar to 100 yen/dollar, it would result in an increase of vehicle exports to the U.S. market of 15.1 percent, and a decrease from 90 yen/dollar to 80 yen/dollar will result in a decrease in exports of -15.1 percent, and in each case, the elimination of the 2.5 percent U.S. vehicle import tariff would increase exports by a further 6.2 percent.”

      I immediately checked the date of the study. I thought I had caught an old one. The dollar buys 78 yen today, not 90.

      On the market share: We want proof, not prayer mills. Just because foreign nameplates hold more than half of the American market, that does not mean that it must be that way elsewhere. In most markets with a strong domestic auto industry, the locals dominate, because they are closer to their market. Often mentioned by me, often ignored: In Europe, Asian brands can’t seem to get out of the 15 percent market share range. Is that an indicator for a closed Europe? No, it is an indicator that there simply aren’t more buyers for these cars. Likewise, there simply aren’t more buyers for foreign cars in Japan. It is a limited market, catering to individualistic, affluent buyers. And the few there are would rather commit seppuku than get caught in a Chevrolet.

      Let’s face it, American cars don’t sell so well abroad. As the market share shows, they even are weak at home.

      • 0 avatar
        BrianL

        The report talks about nominal and real exchange rates as well. Including the nominal rate being below 80, but the real exchange rate being 90. Nominal is a currency exchange rates where real count exchange rates based on goods.

        I also disagree with your statements of market share numbers not being important, because they are. If European and other name plates sold 15% in Japan, it would be 3 times what is sold there today.

        When the European and North American automakers say there is a problem, why should we not believe them and instead believe you? This isn’t Lt Dan on a soap box. This is basically the rest of the auto industry.

      • 0 avatar
        BrianL

        Also, there is a study mentioned in the report in on of the foot notes. Whenever I post the title here, it is reported as spam. But, look at page 5, where it talks about barriers. Did you read the article that was in the footnotes?

      • 0 avatar

        “The report talks about nominal and real exchange rates as well”

        Too bad that banks don’t read the report. They simply refuse to give me another rate than the prevailing one. If I demand the “real” rate, they point to the flickering numbers on the screen. All I get is 78 yen for the dollar, and it doesn’t buy me anything.

        In a few weeks, I will change my location to Japan for a few months and need yen. Could you please steer me to the bank that will give me 90 yen? Much appreciated.

      • 0 avatar
        BrianL

        Let me try explaining this a bit. Say an Apple costs 1 dollar in the US. It doesn’t mean that it costs 78 Yen in Japan because of exchange rates. It could be 60 Yen, or 120, or somewhere in between. Goods can be more or less valuable in one country than another, and this doesn’t necessarily mirror the exchange rate.

        But, since I have now explained this to you, could you explain what else you don’t like in the report?

        You might also want to search and there are several reports where people are expecting Japan to devalue the Yen. They have done it for years and will likely continue to do so.

      • 0 avatar

        No need to explain currencies and purchasing power to me. I lived and worked on multiple continents, and I keep accounts in multiple currencies. When the apple costs a dollar, and when the dollar buys 78 yen, then the apple costs either a dollar or 78 yen. How much does that apple cost in Tokyo? The export of cars does not give a damn. The export of cars from Japan cares how much dollars do I get for my car, and how much is that in yen when it hits my books in Tokyo. Trust me, it hits those books at the prevailing rate, and purchasing power does not change it.

        I recommend a trip to Tokyo. Bring lots of money. Take a bus ($40) from the airport, the taxi ($400) will bankrupt you. After a day, you will wish that they would finally do that currency manipulation you have heard about. Don’t hold your breath.

      • 0 avatar
        BrianL

        Sorry, but you still don’t get it.

        In Japan, an apple doesn’t necessarily cost the same as it does in the US. It could be more or less. In Japan, an apple doesn’t cost the same in every region, in Tokyo, I am sure it costs more. Just like NY is far more expensive than other places in the US.

        The cost of a good doesn’t necessarily cost the same everywhere, including the country. That is what the number they are using is taking into consideration. I am well aware that per dollar, they are going to get the exchange rate of that day. But, it is saying the value in dollars is not equal to the value in Yen using the nominal exchange rate. My guess, this is a before tax evaluation of how much the vehicles sell for in the two different countries.

        Let me put it a different way. Before tax, does a kW of electricity cost the same in the US and Japan using the nominal exchange rate? The answer is no, it doesn’t, because it doesn’t event cost the same in every area of the US.

        You may have lived in other countries, but people who understand finance under nominal and real rates. There is plenty of documentation on the subject. It isn’t like this doesn’t exist.

      • 0 avatar
        mike978

        Brian – I understand your point about purchasing power, but that doesn`t help a Japanese company who exports a car that say cost 2,000,000 yen and then sells in in the US at the prevailing market price, lets say $20K for a midsize car. If the exchange rate is 100Y to $1 then they break even. If however the exchange rate is 80Y to $1 then they lose money (1.6M Y).

        I am shocked how expensive a taxi costs in Toyko, way more than in NY or any other comparable city.

      • 0 avatar
        BrianL

        mike,
        I understand what you are saying, but you aren’t accounting for real exchange rate there.

        I took this from the IMF page.

        “One can measure the real exchange rate between two countries in terms of a single representative good—say the Big Mac, the McDonald’s sandwich of which a virtually identical version is sold in many countries. If the real exchange rate is 1, the burger would cost the same in the United States as in, say, Germany, when the price is expressed in a common currency. That would be the case if the Big Mac costs $1.36 in the United States and 1 euro in Germany (or any other European country using the euro). In this one-product world (in which the prices equal the exchange rates) the purchasing power parity of the dollar and the euro is the same and the RER is 1 (see box).
        But suppose the burger sells for 1.2 euros in Germany. That would mean it costs 20 percent more in the euro area, suggesting that the euro is 20 percent overvalued relative to the dollar. If the real exchange rate is out of whack, as it is when it is 1.2, there will be pressure on the nominal exchange rate to adjust, because the same good can be purchased more cheaply in one country than in the other.”

        Now, apply that to cars. When doing so, this report is saying it is about 90 Yen per Dollar when it comes to cars. Other goods and services can have different real exchange rates.

        Now that the concept has been explained several times over, please let me know what is wrong with the study.

      • 0 avatar

        When I read these currency studies, I am torn. Could it be that they were written by financially illiterate who just noticed that there are different currencies, and that a dollar buys more or less in different places? Or do they bank on the financial illiteracy of the reader? I have no idea. All I know is that purchasing power talk appears to confuse both author and reader.

        1.) The books of a company reflect true exchange rates, not artificial ones. A purchasing power index shows what the rate “should” be. However, books are not kept by should have, would have.
        2.) The financial success of an exported good depends on two factors: What price does the market in the target country bear? What is the exchange rate? As discussed many times here, to compete, a car must be sold for much less in America than in Japan or Germany. If the dollar is low and the yen is high, that already low price converts into even less.

        Using the apples example, two pounds of apples, bought in Tokyo, cost 679 yen, or $8.63. In New York, they cost $3.85 if the data of http://www.expatistan.com/cost-of-living/comparison/new-york-city/tokyo are correct. Using the apples-to-apples index, the dollar “should” buy 176 yen, not 78. Using the Big Mac index, the dollar “should” buy 86 yen, not 78. The market ignores apples and hamburgers and pays only 78 yen to the dollar. People who create the impression of an artificially low yen either are illiterate, or they bank on the illiteracy of the reader.

      • 0 avatar
        BrianL

        Cars may cost less in the US, but they are also taxed differently, which in the US, the price doesn’t include taxes. Content in them is also different. We know that we can’t compare what a Jetta costs in Germany to what it does in the US for these very reasons.

        I don’t know how the study came to the numbers they listed. It would be interesting to see. But, the IMF link I spoke of also mentions that never every item will have the same rate of exchange. Cars very likely will be different from apples and big macs. My point is, real exchange rate can’t be dismissed so easily. If you think the number is wrong, maybe ask CAR as to how they calculate it. Just saying it is wrong because it isn’t the nominal rate lazy and wrong.

  • avatar
    bball40dtw

    Why was Derek’s original article replaced with this one? It went from a very straight foward piece about the last Mazda 6 being built at Flat Rock, to an article about how Mazda doesn’t need Ford and how Ford hates Japan.

    I think a look back at the last 25 years of joint Mazda/Ford production at that facility, a discussion of the benefits the Mazda/Ford relationship brought to both companies, or a look at the future of the facility would be a more fitting eulogy.

    Ford is investing $550 million into Flat Rock and adding 1200 more jobs. Since Americans actually buy the Fusion, this is good news for Flat Rock employees.

  • avatar
    philadlj

    Hmmm…maybe Mazda can buy into and retool Mitsubishi’s Normal, Ill. plant. Poor thing’s at less than 10% capacity. Sure, it’ll be costly, but so’s having ALL your production in Japan.

    • 0 avatar
      TTACFanatic

      They’re building the Dart there, and its going to be a HUGE success … right? If anything Mazda will be joining everyone else in Mexico, that and all the cool kids are getting out of jointly operated plants.

    • 0 avatar
      chicagoland

      No, Chrysler is not building the Dart at MMC in Normal IL. It’s at the Chrysler plant in Belvedere IL, where the Jeep Compass has been made. Mitsu and Mopar got divorced a few years ago, it was all over the tabloids. ;=)

  • avatar
    skor

    Sad to hear. My Ford Probe was built at that plant. The car had it’s problems, but the way the car handled was Teutonic. I always thought of Mazdas as being the poor man’s BMW. After all is said and done, I’m not surprised that Mazda was never more than a niche player. Mazda builds driver’s cars, and most Americans could care less.

  • avatar
    Tinker

    …”and most Americans could care less.”

    So you think most Americans are really into driving? Or did you mean to say COULDN’T care less?

    • 0 avatar
      skor

      Americans don’t care for cars with good balance and braking. Even most motor-heads don’t care. As far American hoons are concerned, it only needs to go like a rocket sled, the rest is just Eurof@g nonsense.

  • avatar
    kamiller42

    “When the financial crisis struck the auto industry in 2008, CEO Alan Mulally believed Ford’s engineers were using Mazda as a crutch,”

    What’s the problem? If your engineers are stuck on “suck,” a crutch isn’t a bad thing. Mazda makes some quality vehicles. Home base engineers could learn a few things. Wasn’t “synergy” in corporate speak?

  • avatar
    el scotto

    Ford was in hock to eyeballs when it sold their Mazda shares. Meanwhile, they killed the Town Car, Crown Vic/LTD/Cop car,the Ranger, the Mercury brand, and turned Lincoln into re badged zombie cars that are only a good buy coming in off lease. They’ll probably kiss and make up with Mazda if it makes business sense and the money’s right. The anti-Japanese propaganda? Probably one of the Ford family members using the Ford company to do dumbass things.

  • avatar
    chicagoland

    All those cars they killed were not making $$, never mind the BS about ‘tooling is paid off’, the UAW needs to get paid. And only old fogies in nursing homes bought Grand Marquis…10-20 years ago! TIme to move on.

    This piece is ‘vindictive’ in slant. Sounds like someone is mad since a ‘critics choice’ car bombed. The 6 was the same as the 626, too small and unknown to sell. Ford actaully imporved the 6 and sold it better! Sales #’s don’t lie.

  • avatar
    Vance Torino

    Two points seem to have been forgotten in this Much Ado About Nothing:

    1.) Flat Rock also builds the Mustang. The second flexible line is now open, likely for Fusion production. Don’t worry about Flat Rock.
    2.) Mazda is working on a factory in Mexico.

  • avatar
    Pch101

    “Former Japan-insider Ford turned into an enemy of Japan. Ford is a ringleader in the new rounds of Japan-bashing, it financed the embarrassing new “study” of the American Automotive Policy Council”

    Honestly, this is a very odd statement.

    Ford has been supporting lobbying against the Japanese auto industry for quite a long time. This was true during the time that it owned an interest in Mazda.

    There are European automakers that also oppose Japan being part of the trade pact. Here’s a press release from the ACEA (European Automobile Manufacturers’ Association) that argues against it. (You will notice VAG, Mercedes and BMW are all ACEA members):

    http://www.acea.be/news/news_detail/auto_industry_sceptical_about_benefits_of_eu_japan_free_trade_agreement

    So, Ford isn’t doing anything that every other automaker in the US and Europe isn’t doing with respect to Japan, and Ford’s position now isn’t different from it was before. This “grudge against Mazda” angle has no substance to it. Follow the money, and it should be pretty obvious why American and European automakers don’t want to help their Japanese competitors to increase their exports.

  • avatar
    billfrombuckhead

    “is worst-hit by the obscenely high yen”??????????????

    Only Zimbabwe has a higher debt per capita than Japan! Japan has been cooking their currency for decades with American companies, American workers and Japanese consumers suffering from this state socialist policy. Adam Smith called this mercantilism and was against it.
    http://en.wikipedia.org/wiki/List_of_countries_by_public_debt

    If Japan is such an open market why did uber competitor Hyundai have to withdraw from Japan?


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