Ford Subsidiary to Establish Joint Venture with Jiangling in China

10/28/96

Reuters reports that Jiangling Motors Corp Ltd signed a letter of intent with the Ford unit Lear Corporation to set up a joint venture to produce interior facilities for car and light trucks. Jiangling and Lear signed the letter of intent in Detroit last month; the two parties will sign a formal agreement in Nanchang, capital of southeastern China's Jiangxi province, in November.

Jiangling and Lear will capitalize the venture at $14.60 million, with each holding a 50 percent stake. Xiong Zhongping, a spokesman for Jiangling, said the venture would be dubbed Lear Interior Decoration System Co. and that it would make seats and air-conditioners for cars and light trucks. Xiong said Jiangling, which is also based in Jiangxi province, hopes in the near future to establish a "sister relationship" with Cleveland Engine & Casting Plants, which is another Ford subsidiary.

Ford and Jiangling have been associated since 1995 when Ford bought about $40 million worth of Jiangling's class B shares--about 80% of them. At that time Jiangling had a total share capital of 693.214 million shares, including 353.240 million state shares, 174.000 million B shares, 117.600 million A shares and 48.374 million legal person shares.

Paul Dever -- The Auto Channel