Ford Buys More of Mazda

04/15/96

Ford Motor Company increased its stake in Mazda Motor Corporation from 24.54 percent to 33.4 percent, thus bailing out the struggling Japanese carmaker and gaining management control over it. The agreement provides for Ford Executive Henry Wallace to take over as Mazda's new president.

Ford will pay Mazda $484 million to control the corporation (which is Japan's fifth biggest automaker). The move is expected to give Ford a strong base on which to build its Asian operations.

Mazda has strong engineering capabilities, but has been hurt by a shrinking share of a depressed Japanese vehicle market, and low exports It reported net losses for the previous two fiscal years and does not expect to show profit for the year that ended March 31.

Ford said Mazda will maintain its independent product development capability, but the two automakers plan to coordinate future product plans much more closely. The arrangement will allow Ford to take advantage of Mazda's distribution network in Japan and other parts of Asia, and the company plans to sell 200,000 cars a year in Japan by the year 2000.

Paul Dever -- The Auto Channel