It hasn’t stopped Ford from running an ad campaign dissing Mazda however. The recent ad for the Focus bagged out the 3. I was actually quite surprised when I saw it…

investing.businessweek.com/research/stocks/snapshot/snapshot.asp?capId=729388

When I looked the share price was trading around 160 yen. As you can see they were in excess of 600 yen a few months ago.

I wouldn’t go so far as to say it has been as bad as GM, whose value has been declining well in advance of the current downturn. They have dropped 96% of their value since 2000!

either way i think ford needed to do it.
they dont lose anything out of the sale. they will still be as much a part of mazdas development today as they were pre the sale.
what this has done is allowed then to take some cash and invest it in their own company to cater for the sudden change in the industry.
of course Mazda will benefit from the development ford undertakes with this new found cash as well.

the return ford was getting from its mazda shares would take at least 5 years to see such cash raised.
ford needs to try and get ahead of the 8 ball now because otherwise lost sales dueto inability to develop new models today, will cost them more than the income lost from not having mazda shares

Ford need to work out how to build a quality car and finally produce it for Australia. I am tired of going to test any new Ford and finding it to be far below average quality. A couple of genius design features maybe, but overall the product is rubbish. Just go get in a taxi to see for yourself and talk to the cabbie about the car. I do nearly everytime I get in a cab with a driver who speaks English. Every single one of them has bad words to say about Ford and nearly all of them don’t own a Ford for their own family drive. I think that says a lot considering most of them are sitting in a car they drive 200,000kms per year.

Also that 313 million dollar profit was for only the first 6 months of this year. So the return on profit would be 22%. (Though this should be discounted to reflect the current downturn).

Hard to say really, in the circumstances it is the right move. I’m no expert, but with the way the market reacted to the news a couple of days ago…

However on the other hand US congress reversed its decision last night, I read it this morning. Huge spike in the share price for both GM and Ford. Those with the guts to buy shares after that miniature crash would have almost tripled their money in less than an hour!

if you were renovating and the trough came along, would you sit on that investment for another couple of years??

if you are still going to make money sometimes the market value isnt all that important.

do you reckon all those that bought houses 10 years ago really care that what they paid 60K for will only fetch $300,000 versus the $320,000 it would have fetched 6 months ago???
I doubt they would be slitting wrists.

say you have bought a house, paid 200k, valued at 300K, and you spent 40-50K on it.
at the moment its only gonna sell for 300K but at the peak time 320K.
do you carry that investment for another 24 months than originally planned and have 250K tied up in it? or sell now and run with that 50K??
by that time the extra interest you will pay on 250K will out weigh by as much as 2 times what you have missed out on by selling at the low point

Oh and just to be noted, the whole 20% wasnt sold to one company. it was split to around 20 companies.

as far as it being an investment, it works out at around a 11% return on investment to those who bought a share.
yes, a solid return, but its still a fair price for ford to recieve for it, especially in these conditions.

each 1% share would have cost 27.5 million.
in this current climate i dont know how they found investors to invest that sort of coin in the auto industry (which is on edge) for such a low return

US congress have refused to bail out the big 3 US auto manufacturers.

The share price of GM has within 10 minutes dropped more than 40%!!!!

Give a week at the most. GM will be filing for chapter 11.

Ford is being hit hard to, shedding another 20% from yesterdays losses.

If Ford sold Mazda 3 months ago they would have got 4 times as much for it!!!

Although I do think the sale had to be done, it was motivated by desperation more than anything else.

The sale worked out to be valued at 550 million USD. To put this into perspective, Mazda made an operating profit of 60.7 billion yen in the first half of 2008, and net income was 29.7 billion yen (313 million USD).

Off course the profits will be much more bleak in the future, but lets just put it this way – there was a reason that Ford had no problems finding buyers for that stake.