Big Three automakers Ford Motor Co., Chrysler LLC and General Motors Corp. are running out of cash amid plunging auto sales and economic turmoil ... and the government
doesn't seem likely to give them the $25 billion piece of the Wall Street bailout pie they're asking for. In the meantime, Ford said it is
cutting its 33.4% stake in Japan's Mazda Motor Co. by about 20%. The deal should net Ford about ¥52 billion ($540 million) based on Mazda's closing price Tuesday, around a quarter of what the stake was worth a year ago, according to the AP. The report noted over the last decade that Ford helped engineer a turnaround at Mazda, rescuing it from bankruptcy by sending executives and sharing technology and auto parts to cut costs.
Mazda's chairman, president and CEO Hisakazu Imaki said in a statement, "We will continue our strategic relationship through our ongoing joint ventures with Ford, as well as the sharing of platforms and powertrains." The automakers have about a 30-year relationship.
Mazda
said it will buy up to 6.87% of its own shares for as much as ¥17.9 billion, while strategic business partners would buy the rest. Mazda also announced a
number of management changes, including replacing its president and CEO Hisakazu Imaki with Takashi Yamanouchi. Imaki remains chairman of the board.
In related news, on Monday General Motors said it is selling its
entire 3% stake in Suzuki Motor Co. back to the minicar specialist for ¥22.37 billion. The heads of the Ford, Chrysler and the United Automobile Workers will testify before Congress on Tuesday and Wednesday; The New York Times suggests it is GM's CEO Rick Wagoner and his company that have become the
lightning rods of the debate over whether Detroit should get a bailout. -
Baz HiralalGo to the stake sale press releaseSee the AP storySee Mazda's new leadership
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