Ford May Sell Mazda Stake
by
John Horner
Published: October 11th, 2008
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The scramble to raise cash over at Ford continues apace. Recent press rumors out of Japan [via The Associated Press] say The Blue Oval Boys are talking with the Zoom Zoom Zoom folks about selling all or part of the American automaker’s share of Mazda. Ford first invested in Mazda back in 1975. FoMoCo increased it’s stake to 33.4 percent in 1996. Mazda was on the ropes in 1975, thanks to having most of it’s chips on the Wankel-cycle rotary engine. The oil shocks of the 1970s killed the rotary engine and put Mazda on Death Watch. Ford rescued Mazda with cash and know-how. Since then, the Mazda-Ford partnership has been one of the most productive in the industry. Today the companies share platforms and drivetrain development on a global basis. For example, Ford’s four-cylinder engines are based on the Mazda MZR family and Mazda has standardized on Ford’s V-6 engines. The two companies also share factories in Thailand, China and the US. Considering these deep ties it isn’t surprising to hear that “Ford would maintain some of its stake in Mazda and management ties.” But, with Ford burning over $2b every quarter; there aren’t many good choices left. Ford has made it clear that they aren’t interested in handing Mazda over to a competing auto maker, but will they have any choice?
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Subaru's "issues" relate to a couple of factors, ronin. First, they're pretty small (in terms of Japanese companies as well as "globally"). Second, they've needed a "white knight" to help them along - first it was Nissan, which when it had its money issues, sold Subie's stake to GM (which "used and abused" them rather than helping them), then when GM went "more broke" they sold their stake in Subie - to TOYOTA.
"The big question is, what happens to Mazda without Ford?" An excellent point. Mazda by itself is not large enough to compete in today's market. They either need to stay married to Ford for development and manufacturing purposes or find another partner. Mazda and Ford both are probably highly motivated to keep the relationship alive even if some shares are sold to one or more third parties. The other option perhaps would be to use Mazda as the hinge of a larger partnership between Ford, Mazda and another automaker. Maybe Tata, Hyundai or even PSA Peugot-Citroen.
Ford will be shooting themselves in the other foot (if the sell Volvo first) if their stake in Mazda is sold. I mean, c'mon! The Mazda/Ford partnership is one of the few bright spots in the automobile-dom. Most of everything Ford sells is somehow tied in to Mazda's engineering skill and quality controls. I fail to see how this latest move by Ford will aid the company in any way.
I've got to agree with RobertSD and the more level-headed commentators here. I'd like to echo the above commentator's statement in reverse: Most of everything Mazda sells is somehow tied into to Ford's engineering skill and quality controls. There's a real system of collaboration between Mazda and Ford that has been going on for sometime, but has really reached a great level of equal collaboration in the last few years. I would imagine and hope that if Ford does sell some percentage of their stake in Mazda that this collaboration will continue. In my opinion, this probably the least worrisome sale or divestiture by any automaker.