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SOURCE: Detroit News

Friday, October 31, 2008
Ford-Mazda ties to remain strong
Dearborn automaker may sell a part of its 33.4% interest, but will keep production alliance.

David Shepardson / Detroit News Washington Bureau

CHANTILLY, Va. -- Ford Motor Co. and Mazda Motor Corp. will remain close working partners even if the Dearborn automaker sells all or part of its controlling stake, Mazda's top North American official said Thursday.

"We have a very strong relationship with Ford," said James J. O'Sullivan, president of Mazda North America. No matter what happens "those relationships will continue because we are very, very ingrained and we've got a great working relationship."

O'Sullivan said in an interview with The News that Ford and Mazda's relationship is "the best working alliance that has existed" in a global auto industry that's had many disastrous alliances. He was in Virginia at the opening of a newly built Mazda dealership near Dulles International Airport.

Earlier this month, The Detroit News reported that Ford is weighing a sale of part or all of its 33.4 percent controlling interest in Mazda. Mazda could buy part of that itself, but several other Japanese companies have also expressed interest.

Regardless, Ford plans to retain a sufficient stake in Mazda to guarantee that critical collaborative ties between the two companies continue, The News reported earlier this month.

In recent years, Ford has become increasingly dependent on Mazda to supply the underlying architecture for most of its cars and crossovers. Ford also has adopted Mazda's product development system.

In return, Mazda has benefited from Ford's global scale. It has used Ford engines and other components to build cars specifically for foreign markets.

Ford and Mazda have a plant they jointly operate in Flat Rock that builds the Ford Mustang and newly redesigned Mazda6, which began production this summer. "The Mazda6 in Flat Rock obviously is very integral to the North American business," O'Sullivan said. He said Mazda hoped to ramp up to eventually produce about 100,000 Mazda6 vehicles annually in Flat Rock, which the company would sell in the U.S., Canada and Mexico.

Mazda is unveiling its newly redesigned Mazda3 at the Los Angeles Auto Show next month.

Mazda posts earnings drop

Last month, Mazda announced that it would no longer use Ford Credit to finance vehicle sales. It's dealers are now using Chase Auto Finance to underwrite purchases. O'Sullivan said that was a good move for both Ford and Mazda, since it helped ensure adequate financing for both companies.

Mazda is worth about $4.1 billion, making Ford's share worth more than $1.3 billion.

Mazda posted a 45 percent drop in quarterly earnings on Thursday. Its second quarter net profit fell to $147 million from $270 million in the period ending Sept. 30 from the year before. Mazda said it is planning to sell 1.405 million vehicles this year, down 75,000 from an earlier goal.

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