Ford to sell Mazda?

[Rupewrecht]

http://business.theage.com.au/busine...1012-4yvs.html

Ford may sell Mazda stake

Ford Motor Co., the second-largest US automaker, is considering selling its controlling stake in Japan's Mazda Motor Corp. to bolster cash as sales fall, a person familiar with the deliberations said.

A sale of the one-third holding in Mazda isn't certain, said the person, who asked not to be named because Dearborn, Michigan-based Ford hasn't made a decision. ``We do not want to comment on speculation,'' Ford said today in a statement.

Dumping Mazda would help Ford blunt a mounting cash drain as the US auto market sinks to the lowest levels since 1991. Ford's domestic sales slid 35% in September, outpacing a 27% industry drop, on sagging demand for the pickups and sport-utility vehicles that provided most of its 1990s profits.

``It does make sense to sell off Mazda,'' said Dennis Virag, president of Automotive Consulting Group in Ann Arbor, Michigan. ``Mazda has no role in Ford's strategic plan.''

The possible sale was reported earlier by Nikkei English News and state-run Japanese broadcaster NHK. Hiroshima, Japan-based Mazda said today it had nothing to announce, according to a statement.

Based on yesterday's closing share price in Tokyo, Ford's Mazda shares were valued at $US1.36 billion.

Ford, which has posted $US23.9 billion ($36.6 billion) in losses since its last annual profit in 2005, formed an automatic transmission joint venture with Mazda in 1969 and acquired a 25% stake in Japan's fourth-largest automaker in 1979. Ford expanded the holding to 33.4% in 1996, giving it effective control.

Dumping assets

A sale would extend Ford's moves to shed assets outside the US, including U.K. automakers Jaguar and Land Rover, as Chief Executive Officer Alan Mulally focuses on shoring up the automaker's money-losing North American operations. He faces a balancing act to ensure that Ford has enough cash to weather the sales slump while still developing new models.

Ford had automotive cash of $US26.6 billion as of June 30, after borrowing $US23.4 billion in late 2006 by pledging collateral such as its headquarters building, factories and trademarks.

After targeting 2009 for a return to profit, Ford withdrew that goal in May and hasn't set a new one. The company's second- quarter loss was a record $US8.7 billion.

As part of Mulally's push to diversify Ford's product lineup at lower costs, Ford is planning to merge its Mazda6- based Fusion platform and its European Mondeo sedan platform starting in 2010.

Switching lenders

Also last month, Mazda said it is switching to a unit of JPMorgan Chase & Co. as the main source of US financing for its vehicles from Ford's in-house lending arm. Chase Auto Finance Corp. will be the primary provider of loans and leases starting Oct. 16. Ford and Mazda said the move was a joint decision.

Ford and Mazda jointly own factories in the US and Asia, including a Flat Rock, Michigan, plant that produces the Mazda6 and Mustang.

Ford has used Mazda to help groom executives, including incoming Chief Financial Officer Lewis Booth and Executive Vice President Mark Fields, who heads Ford's North American operations. The US automaker has also based models on Mazda platforms or major structural parts. They include the Fusion midsize sedan, based off the Mazda6.

After Mazda shares tumbled 48% this year, Ford may want to hold off on a sale until stock prices improve, said Maryann Keller, an independent auto analyst and consultant in Greenwich, Connecticut.

``This isn't the time to sell,'' Keller said. ``Ford would not get the fair value for that business.''

and http://www.businessday.com.au/busine...1012-4yv4.html

No decision on sale of Ford stake: Mazda

Mazda has denied that a decision had been made by troubled Ford Motor Co to sell its stake in the Japanese automaker, but didn't rule out a possible deal.

Japanese media reported Saturday that Ford was considering selling its one-third stake in Hiroshima-based Mazda Motor Corp. Public broadcaster NHK, without citing sources, reported that Ford would maintain some of its stake in Mazda and management ties.

"Nothing has been decided," Mazda said in a statement received Saturday. "Any important decision will be disclosed."

Dearborn, Michigan-based Ford said in a statement, "We do not want to comment on speculation."

"Our relationship with Mazda has not changed," it said.

The move, should it happen, would be a symbolic retreat for US automakers in Japan. General Motors Corp similarly sold off its stakes in Japanese automakers in recent years.

Selling shares of Mazda, which makes the RX-8 sports car and Miata roadster, would furnish Ford with cash as it tries to turn around its business.

Ford has struggled amid a drastic downturn in US auto sales, burning through nearly $US11 billion ($A16.09 billion) of its cash stockpile in the past year. It reported its worst-ever quarterly loss of $US8.7 billion ($A12.73 billion) in the second quarter.

Speculation has risen that Ford may file for bankruptcy, although it has denied that. Ford's stock price has also suffered, plunging to its lowest level in 25 years.

Ford formed a capital alliance with Mazda in 1979, taking a 25 per cent stake. That was raised to 33.4 per cent in 1996 - a controlling share in Japan.

Over the last decade, Ford helped engineer a turnaround at once-struggling Mazda, sending executives and sharing technology and auto parts to cut costs.

Mazda, Japan's fourth-biggest automaker, has been a bright spot in Ford's otherwise-gloomy fortunes of late. Mazda posted a six-fold surge in profit in the April-June quarter.

In an interview with The Associated Press in Detroit on Friday, CEO Alan Mulally denied Ford was about to run out of cash.

Mulally did not rule out asset sales as a way to raise money, but did not refer to Mazda specifically.

"Cash is really, really important, so we are managing that very carefully," Mulally said.

[project.r.racing]

Why would you sell the best selling arm of the corp?

I understand selling off jag and land rover, cos they a very poor sellers.

[andrewck]

They are Americans what more can I say

[mussing]

'Cos they really, really need the dough.

[mrpayner]

Originally Posted by project.r.racing

Why would you sell the best selling arm of the corp?

I understand selling off jag and land rover, cos they a very poor sellers.

I wouldn't say that Jag and Land Rover are poor sellers, they're more of a niche market. They're probably not quite as popular here in AUS but in other markets like Britain they sure are..

[project.r.racing]

niche markets make big dollars?

[mrpayner]

not necessarily, but their cars are more expensive!

[Rupewrecht]

Apparently Mazda Australia made a profit of $59 million last year!

[mrpayner]

That's great news! Considering what little market slice they have in Australia.

GO Mazda!

[LordWorm]

Originally Posted by project.r.racing

niche markets make big dollars?

it'd be because they can raise the most capital by selling off mazda... they'll probably get 4x the cash by selling mazda than if they sold jag and landrover combined... seems they are in a fair bit of trouble and are looking to fill up the coffers to bolster themselves for the lean times....

Mazda would also be more attractive to potential buyers - because its not a niche market... In a recession there will likely be a return to more economical, common and inexpensive vehicles - which means a cashed up buyer would see mazda as a bargain at any price....

It might seem short sighted...but they probably see that they need to raise a significant amount of cash - and dropping mazda is the easiest way to do so....so they can survive through the short term.

[Ice88]

All depends how much of Ford is financed or borrowed against, if its a large percentage then selling mazda may be there bail out plan.

[Cosmo Dude]

Sell Mazda and buy GM?
I heard that GM shares are at their lowest point in almost 80 years (don't know how true)

[Rupewrecht]

More:

http://www.themotorreport.com.au/104...rs/#more-10408

[70NYD]

hmm mayb we should all buy shares in GM

[rodhog]

GM there the reason the US has no market

they had a car to kill the pryus but GEORGE I'm a DICK HEAD PRESIDENT PUPPET BUSH killed it


GO WATCH

" WHO KILLED THE ELECTRIC CAR"

It's typical of the problem of America being on top. Hope they all losee it

and GERMANY or Japan comes back Or even CHINA