Mazda and Ford Break Up, Remain Friends

[Mike]

11-18-2008 11:46 AM

Mazda has announced last night that it is breaking up with corporate partner Ford. Until now, Ford owned a 33.4 percent of Mazda’s stock, giving it control over the company under Japanese law. But now it’s selling off 20 percent, worth approximately $540 million, to raise desperately needed cash.

The alliance began back in 1979, when Mazda spent much of the decade developing the fuel-thirsty rotary engine, even after the 1973 oil crisis. Ford purchased a 27 percent stake then and slowly increased its share during the 80s and early 90s. Together, they shared many platforms such as the Mazda MX-6/Ford Probe, 323/Escort and 6/Fusion. The two companies have said they will continue to save costs by working together on more platforms in the future.

This news follows GM’s announcement yesterday that it would sell its remaining 3.02 percent share in Suzuki.

[AP]

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[Carl Beck]

You know what is simply amazing to me - although I don't know why it should amaze me....

With all the talk about Chrysler, Ford and GM facing bankruptcy in the media these days, and all the talk about how many jobs in America would be lost.... Not one talking head has mentioned the fact that all three of the auto makers have been outsourcing jobs and purchases in mass to China for the past ten years. So even if we taxpayers did put up our money to save them - the jobs and associated support businesses will be gone anyway. All of them have massive operations in Mexico now with NAFTA, and they have been operating in Canada for decades. Ever more and more of their component parts are coming from China anyway..

Let them get their loans from China and Mexico.

I've already called my Congressman's and Senators offices and told them I don't want a penny of our tax money going to any of them. If we help any auto makers it should be Toyota, Honda and Nissan as all three of them actually produce cars/trucks here in America with over 85% American content.

FWIW,

Carl B.

[sblake01]

Carl, I couldn't agree more. Just another example of the media painting a bleak picture about something while leaving out some very important details. Without going into detail since I really don't like to get too political here I'll just say that I've also written the state legislators on this matter as well as others.

Edited November 18, 2008 by sblake01

[zbane]

One thing I find interesting about the whole Ford/GM/Chrysler fiasco is that it seems that they are the only automakers that are having serious problems. All the other automakers seem to be doing well, and I feel it is because the others have been listening to what consumers want (or accurately predicting what they will want) for years.

While the Big Three have continuously manufactured big gas guzzling vehicles (and relied on them for their bread and butter), others have been producing smaller, more efficient vehicles. Sure, Honda, Toyota, and Nissan (and most of the others) all have larger gas hogs, but they are produced in smaller quantities. Cars like the Civic, Celica, and Sentra have been paying the bills for the "outsiders" and have set the benchmark for reliability, fair styling, and reasonable comfort.

If the Big Three had simply done a better job of paying attention to changing markets and customer wants/needs, I feel they would not be in such a precarious position (though I may very well be completely wrong).

Another thing: Brand manufacturing.

Does the world really need three versions of the Chevy Silverado (Chevy, GMC, Cadillac)?

Three versions of the Ford Explorer (Ford, Lincoln, Mercury)?

Sure, the same can be said for a couple Nissan/Infiniti SUVs, but again, Nissan isn't counting on their SUV sales to carry the payroll.

[zhead240]

i take offence with canada being lumped with china and mexico. our auto industry pay living wages and benifits and is on a level playing field with or neighbors in the U S. we both have enviromental laws with reguard to hazardous waste disposal for the auto industry which adds cost to production. i may be wrong but i don't think china and mexico have an EPA or if they do it's a joke.

[Carl Beck]

No offense intended to our friends in Canada... It's just that we US Tax payers don't really need to bail the big three out to "save jobs here" - - when all of the big three only produce a percentage of their products here, and they are doing everything they can to cut jobs here every day.

Perhaps they need to be hitting Canada up for a few Billion Canadian Dollars to save jobs there as well.

My objection is really that our media know full well that the major corporations in the world are "World Corporations" - - yet somehow they keep calling them American Corporations when they have major problems, and somehow all the media talks about is how we will lose jobs here in the US.

Only a fool believes that when capital is free to move anywhere in the world to buy the cheapest labor and lowest overhead -that somehow fully industrialized countries will be able to maintain a middle class. Unless things turn around in a manor way - there will be two classes of people in the US just like the other 80% of the world - 5% will be rich beyond belief and 95% will be poor. Our grandchildren are already facing a debt burden greater than all previous generations of Americans combined. When the US Federal Government files bankruptcy - we'll look just like Russia today - it will be every State for themselves.

The people in the USSR never believed it would happen there either..

Edited November 18, 2008 by Carl Beck

[MEZZZ]

While we are debating this, lets not forget that there really isnt a Big Three any longer. Chrysler is owned by Daimler now and I look at it more as a foreign company now.

G/M & Ford have themselves (and the U.A.W.) to blame for the position. Go back to the late 60's when they all shrugged off the Japanese competition. They continued to pump out the same tired junk, year after year.

The mid 70's thru mid 80's were the worst years the Big 3 had as far as quality. Their cars for the most part were cr@p. They let the unions dictate policy that were unheard of in other industries. Take poor quality, outrageous payroll and benefits and they were doomed a long time ago.

I think they have one option and that is to file Chapter 11 and restructure. Get concessions from the unions and some tax breaks from the Government to produce products that the population needs and wants. Cut down to one model car, Chevy, Cadillac, Pontiac, Buick, GMC, Hummer, Saturn. (Saab) etc. Call the company G.M. and get rid of the duplicate and triplicate brands. Slap a tarriff on foreign autos as well like other countries do to the U.S.

They might have a chance then. I am a bit leary of the tarrifs as it might lead them to produce inferior products one again as competition is what drives any company.

[BRE-240Z]

Chrysler is owned by Daimler now and I look at it more as a foreign company now.

Actually, Daimler spun Chrysler off to Cerberus, which is some kind of New York financial consortium. There was a lot of discussion in the trades that instead of Chrysler's quality going up due to the Daimler influence, the reverse was happening. I don't know if that's true, but Daimler definitely ended the experiment and took a bath for their trouble.

[geezer]

It looks like Mike's thread morphed into something else. I don't want to say much as far as US government bailout money is concerned. I have the potential to wizz off too many people. I would like to point out however that here in Canada, in Ontario under the leadership of Premier Dalton McGuinty since late 2003 that 7 billion of the tax payers money has gone to subsides, to various automakers without recieving a single job guarantee. There are also a lot of mixed feelings here on this practice. It is not only the automotive jobs at risk but also the estimated 7 X spin off jobs. At best this money only eases the hurt and prolongs the inevitable, in hopes of better market conditions to prevail and create profitability. If you had friends, family, neighbors and basically the entire community relying on these jobs, obviously you would be in favor of government assistance. If you think you won't be touched, you have misread the long reaching ripple effect. From listening to peoples arguments (not here) it is clear to me that some don't understand the nature of multinational corporations, who strategically plan how to play one government against another. Can you blame them for trying? Another point to consider is the intertwined state of all the automakers worldwide. They are all dependant on each other and if one fails the others will feel the pain also. Discussions of this type alway revolve around high union wages or the bad management decisions of "domestic" automakers. Those are minor contibutors to todays problems. We are a long way from seeing the arse end of hard times.

[sblake01]

It looks like Mike's thread morphed into something else.

Not really. The reason that Ford dumped its stake in Mazda it the same reason that GM is dumping its stake in Suzuki. To raise its cash reserves to attempt to stay 'afloat' which is the word I believe they both used in other articles I've read. Be that as it may, the only economic situation that any of us remotely have any control of is our own individual situation. We have no control over the macro side of the economic world and until they find a direction that works 'hard times' will exist. Edited November 19, 2008 by sblake01

[JonnyRock]

One thing I find interesting about the whole Ford/GM/Chrysler fiasco is that it seems that they are the only automakers that are having serious problems. All the other automakers seem to be doing well, and I feel it is because the others have been listening to what consumers want

This is simply not true.

In year-over-year September sales, Toyota saw a decline of 32.3%. Honda was down 24%. BMW was down nearly 26%. These numbers were only marginally better than the Big 2.8 (It's the big 2.8 because GM and FoMoCo are American, while 80% of Chrysler is now owned by Cerberus LLC and 20% by Diamler).

Every automaker is hurting wildly right now and it's because we are experiencing a credit crisis and the public is unable to get the credit necessary to purchase new vehicles.

Check out the scary statistics:

Autoblog By The Numbers - September 2008: Nobody Wins Edition

Edited November 19, 2008 by JonnyRock

[lonetreesteve]

I don't want to see the big 3 get any bail out money either. If they all have to file Chapter 11, then so be it. They will all come out better after filing and will be leaner, meaner, produce better products and eventually help the US economy again.

Edited November 19, 2008 by lonetreesteve