FORD Motor Co, after almost three decades as an investor in Japan's Mazda Motor Corp, is considering selling its controlling stake, 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 identified because no decision has been made. "We do not want to comment on speculation," Dearborn, Michigan-based Ford said on Saturday in a statement. Yukari Hara, a spokeswoman in Tokyo for Hiroshima-based Mazda, declined to comment yesterday.
Unloading the stake would end an era in which the second-largest United States auto maker used Mazda to help groom executives including its incoming finance chief and its current head of North American operations. Ford faces a mounting cash drain as the US auto market sinks to the lowest levels since 1991, Bloomberg News said.
"Everything needs to be looked at in the current situation," said Dennis Virag, president of Automotive Consulting Group in Ann Arbor, Michigan.
Based on Friday's closing share price in Tokyo, Ford's Mazda holding was valued at US$1.36 billion. Ford has lost US$23.9 billion since the end of 2005. Last month's 35 percent slide in US sales outpaced the 27 percent industry drop as the credit crisis damped auto demand, especially for the pickups and sport-utility vehicles that provided most of Ford's 1990s profits.
No role
The possible sale was reported on Saturday by state-run Japanese broadcaster NHK and by Nikkei English News, which has named trading houses Sumitomo Corp and Itochu Corp, along with India's Tata Motors Ltd, as possible buyers.
Calls to the Tokyo offices of Sumitomo and Itochu have gone unanswered on this three-day Japanese holiday weekend. Debasis Ray, a spokesman for Mumbai-based Tata Motors, declined to comment on Saturday and could not be reached yesterday.
"It does make sense to sell off Mazda," Virag said. "Mazda has no role in Ford's strategic plan."
Under Chief Executive Officer Alan Mulally, Ford is emphasizing unifying its own regional units as it tries to end losses.
The auto maker's European division with its small-car models "basically replaces the role Mazda played," said David Cole, chairman of the Center for Automotive Research in Ann Arbor.
Ford formed an automatic-transmission joint venture with Mazda in 1969 and acquired a 25 percent stake in Japan's fourth- largest auto maker in 1979. Ford expanded the holding to 33.4 percent in 1996, giving it effective control.
A sale would extend Ford's moves to shed assets outside the US, including UK-based auto makers Jaguar and Land Rover, as Mulally focuses on shoring up the car maker'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.