Ford to sell shares in Mazda
October 20, 2008 by Alborz Fallah
With GM trying to get rid of Hummer to raise capital, Ford Motor Co. is in the final stages of plans to sell shares in Mazda Motor Company to an estimated 20 Japanese firms, with full details expected by next month.
The Blue Oval has a significant 33.4 percent stake in the Japanese giant but as it struggling with weakening sales and the global credit crunch, ridding it self of Mazda shares seems an easy way to raise some much needed cash.
The current rumours suggest Ford will dispose of about 20 per cent (one per cent to each company) and that Mazda itself will also buy back some of the shares.
Well-known Japanese firms involved in the deal include Tokio Marine Holdings, Mitsui Sumitomo Insurance Group Holdings, Sompo Japan Insurance, Nipponkoa Insurance, Aioi Insurance, Sumitomo Corp. and Itochu Corp. as well as parts maker Denso Corp.
Mazda is currently valued at about $US4-billion and Ford expects to raise a little under $US1-billion from the sale.
One of the requirements of the sale is for Mazda shares to remain out of the hands of rival automakers as both Ford and Mazda intend to continue their business partnership, which includes the operation of jointly owned factories in Thailand, China, and the United States.
Print it: 
It’s a shame that the rest of the Ford world will suffer because of the incompetence of headquarters.
Mazda is the only good asset they have, that has actual potential to carry them over.
Oh well…. atleast now, when sold back to japanese companies, Mazda can be fully utilized once again.
Mazda has been terrific for the last 5 years. And thats coming from a competitor designer :-)
It would be more profitable if Ford closed itself down completely, and just remained an owner of 33% of Mazda.
Ford seems unable to remain associated with profit making enterprises – I’m sure it’s because their accountants and management don’t know how to deal with profits.
Sounds like the queensland government logic.
“Let’s sell our best asset and long term income potential for quick cash right now” (in the case of our state government it’s our vast reserves of CNG).
THe thing is though, even though MAzda is well regarded in Australia and has some great body styles, it is actually only an also ran in ohter countries. Yes the RX8 sells in okay numbers in Europe and the US, but the other models are very low volume.
Given the low volume, and the fact that Ford only owns 33% of Mazda, (so doesn’t get the full return) but due to platform and engine sharing etc spends a bucket on assisted design then getting rid if it really isn’t that bad. Interesting to note that the majority of motors, trans and suspension units in Mazda’s are Ford. Also the fact that the Euro Fords are going to be built in the US as they change the truck plants over, that would mean they would be taking on the small share that Mazda had.
Personally I’d be more worried about the survival of Mazda when Ford do sell, remember they were a basket case before Ford bought in, and realistically are still only treading water and going nowhere.
Frontman, I think Mazda learn’t a lot from the tough patch they went through in the ninties. They have become very adept at taking ordinary engineering and components from Ford and then re-engineering them and making them do and perform in a way that Ford seems incapable of.
They also now know their place in the world as a relatively small manufacturer – not neccessarily a negative as you make it sound.
This deal sounds like they will still get all the benefits of the access to Fords spare parts bin, and some subcontracting from Ford, without the Ford mismanagement that until now went with it.
I would also expect these 1 percent share holders to pool together their shares in time too. The Japanese don’t think short term like Americans, so this ploy by Ford is not going to have any real effect on Mazda or its future success or ability to compete with Ford directly.
All in all a win for Mazda.
Dan
Well fancy that, Toyota own a portion of Subaru, now they will be buying a portion of Mazda as well (Aioi and Denso are owned by Toyota).
Selling any amount of their share in Mazda will raise some cash in the short term, but it is a long term mistake. Ford need to keep a more controlling share in this interest.
Mazda has a steady growth and Ford need to be apart of that for future development.
VW Freak,
Toyota own a portion of Subaru’s parent company, not Subaru itself.
I agree Salesman – Mazdas design; build quality and specifications etc has improved over the years so much so that sales steadily increasing particularly with the Mazda 3 Mazda 6 and CX-7 and I wouldn’t be surprised if within the next couple of years Mazda overtake Ford Holden and quite possibly Toyota in the sales race.
KJ has a point. it would be a lot quicker and easier to keep Mazda and get rid of Mr Ford Jr Snr Jr and Allan Mullally instead.. In the same way GM should just get rid of Mr Prick Waggoner and let Bob Lutz take charge
Because given the bargain basement price Ford received for a premium prestige brand like Aston Martin.. they would be lucky to receive any more than $200;000 for Mazda
Regarding the comment about Toyota owning shares of Subaru’s parent company, FHI.
Toyota’s shares are actually primarily of Subaru’s stakes. A little research using google should help as reference.
The Article states that part of the deal is for Mazda shares not to be sold to rival manufacturers. Then you see 1st tier affiliates such as Denso etc as potential buyers… thats a loop hole right there. Toyota owns a big chunk fo Denso, pretty much subsiadary affiliate.
And the other japanese companies? Its pretty well known already that Japan operate in a honor policy with each other. What ever helps their nation stay stronger.
If there is a restriction with the selling of Mazda, it will most likely be time restricted. If not, through the affiliates, technically companies such as Toyota owns or have part ownership of those shares.
Ford is losing the plot, as someone stated, they should just get rid of the Ford brand and focus on Mazda. Mazda has terrific momentum at the moment and with all the focus on this brand, Ford can make a killing as the company behind Mazda….
Mazda’s are good cars. They are reliable and have good build quality inside and outside with body panels, ailgnments etc. Though…………………..
No. 1 Mazda’s arent very cheap
No.2 (This is the main one)……………..General Mazda Parts to buy are very expensive. For example to buy a new Mazda headlight or taillight, it would cost nearly double the price of a equivelant Holden, Ford, Toyota part etc.
Hey guys, look at the motoring world outside of this tiny little Island and you’ll understand my comments.
As for their performance, again lookin at the US as it is one of the largest market places, (Appologies to the Moderator) I quote from another source
[{Quote} Mazda North American Operations sold 16,169 vehicles in September, down 35.6 percent compared with last September. Year to date, Mazda has sold 215,408 vehicles, down 6.7 percent. {end}]
So whilst yes they are impressive numbers when compared to Aust. they are extremely small in the scheme of things.
As to Mazda re-engineering the product to suit, the only veicle that they have done any major re-engineering on of late, (no I don’t mean bodyshells) is the 6. Mondeo Platform and Motors (no not available in Aust admited) but Mazda Suspension borrowed from Volvo. The CX’s are derivatives of things like the EDGE in the US.
Now I love most Mazda’s and have a really deep affection to the Rotary. But if I was pouring as much into it a Ford is (especially considering they don’t have a lot spare) and the decision was between selling Volvo (undrperforming unwanted but growing) or Mazda (loved by everyone but underperforming) I tend to agree with Ford.
Why dont they sell saturn and licoln! they might not be worth as much but i’m sure those companies are hindering the growth of their pockets.
Ummm… Saturn is GM not Ford.
So Ford will get $US1 billion from the sale. Ford are burning through $US1 billion each month.
Yep, mazdas are great little cars.
Just picked up a Mazda 2 as a city runabout.
Very happy with it.
Not quite Frontman, Mazda actually design a lot of the 4 cyl engines for the Ford empire. For example the 2.0 in the Focus is more Mazda than it is Ford. With the Mazda3/Focus/Volvo shared platform Ford was given suspension design duties etc, Volvo chassis rigidity due to their reputation for safety and Mazda was asked to design the 4cyl engines. Not to mention that for some years now Mazda has been one of the most profitable arms of the Ford empire. How can an arm that is pulling well above it’s weight financially be called under performing?? So what if Mazda is small in the scheme of things. One of the most profitable car manufacturers in the world (as in, hasn’t spilled much red ink in many years) is Porsche, not what you would call a large manufacturer but can still be called mainstream like Mazda. I know it may be comparing apples with oranges, but saying just because the company is small doesn’t quite cut it. By the way, the current 6 is not based off the current Mondeo platform, it is a development of the previous model 6. Also, what non-MZR family (read Mazda designed) engines are fitted to the 6 in Europe including the diesel? (which is a Mazda engine and not a Ford, just look at the difference between the Mondeo oiler and the one in the 6, no comparison with the Mazda far out performing the Ford). One last thing, the “control blade” style rear suspension design on the 6 etc was developed by Ford, not Volvo. :-)
Frontman,
the mazda 6 is run off the old Mondeo platform, whilst the new mondeo runs off a totally different platform.
Im not really sure how far they expect 1 Billion to last. in the auto industry that cover the development of one model, and its burnt.
but in saying that, Ford and Mazda seem to be going about this in a very smart way.
Ford will still have the main controlling say of Mazda. the agreement in place almost makes that a certainty.
Reckless 1,
its pretty much Ford US that cant turn a profit.
Ford in OZ, UK and SA report promising profits. its just the US of A that ensures the 4 steps forward made by the other locations are met with 3 steps backward
I say sell Ford US.
you wouldnt want to have any affiliation of anything in the US at the moment whether it be cars or clothing manufacturers
Mazda should buy all the shares back and tell Ford to take a hike….
A lot of people like ^^^ seem to forget that if Ford hadn’t invested heavily in Mazda during the 80’s Mazda would not be around today.
I wish too that Ford USA would dissolve, but thats not going to happen. My fear is that in its final death throws it will sell off Ford Europe, and all of the other satellite Ford companies that actually make cars people might want.
ford should sell the expertise of ford europe to mazda and form a new standalone company. i think we can expect great things from this partnership. partnership with honda also seems likea good idea
Seems strange to sell a viable and popular sector off, I presume this will impact on the account for Ford in the East. Like Frontman says their market presence in Europe is minimal. 2 or 3% about a fifth of what Ford and Vauxhall sell.
Ozmazdaclub ZB Says:
Mazda should buy all the shares back and tell Ford to take a hike….
They would become very expensive cars if they did that. All car companies have an alliance of some sort to share the research and development costs. In other words it is allot cheaper to share than try and operate on your own.
The Multi Link rear suspensions used in ALL Mazda’s are designed and made by Mazda and not Ford.
In fact Mazda’s multi-link suspension Won a Japanese Engineering Society award.
Mazda plants have been in 3 shift 24hour mode for years, so they are hardly treading water!
The ONLY country that has not had record Mazda car sales is the mighty USA/Canada.
They should be selling 4 times the numbers they are doing now.
Any wonder Mazda Japan want to take control of distribution in North America and also fix their appalling Dealer network which has been letting down the marque for years.
Mazda Japan owns virtually ALL other distribution centers on other continents.
I see a lot of people talking smack about Ford and getting all wet about Mazda. Google “Ford rescued Mazda” and then come back and talk. This is why marketing goons and car designers get paid the big $; because facts mean nothing when perception is everything.
Everything about where Mazda is today is not just because of Ford rescuing the company with cash when Mazda was in the toilet both product-wise and financially, but because of Ford know-how.
What do you get if you put a fashionable badge and pretty sheet-metal on a Ford? A Mazda.
Parts for mazdas aren’t that expesive, not for servicing anyway. Its cheaper to buy genuine oil/air filters etc from mazda than it is to buy them at supercheap auto and the like.
Ford bought into mazda because of the emerging tech and products they were introducing at the time.
U.S mazda sales are down butthere are about 15-20 manufacturers doing worseand the 6 has its own unique platform not shared with any other ford prduct.
Ford U.S are stupid for selling off the only profitable company they have in their portfolio,they just keep proving what TOSSMONKEYS they really are.
^^ When you are dying of dehydration, drinking your own piss is a survival technique, even if eventually it’ll kill you (not talking evaporating the water out either). Point is, even if though Ford have a good thing going with Mazda (netted $US60mil I think from the investment), when you need money short term to avoid going bust, you have to sacrifice long term gain.
I meant $60 million last quarter, not total.
Ford probably will get through and when they come out the other side i think they’ll regret offloading Mazda considering the technical and design superiority Mazda seems to have over Ford.
Ford need Mazda, for everything really, with technologhy and everything they get from them otherwise there doomed!
Like Holden need Chevrolet for the LS2 and LS3 and the the……………LS7!
Prolonging the invietable thats all, I think Ford is going bust sooner than they expected with the market turmoil happening. As someone said close to burning 1bill per month, I think I read it similar to this figure in the economist few editions back, you can see why…