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Ford, ZF to Form Joint Venture for Transmission Production

13 October 1998

Ford, ZF to Form Joint Venture for Transmission Production

    DEARBORN, Mich., Oct. 13 -- Ford Motor Company and
ZF Friedrichshafen AG have announced their intention to form a joint venture
to produce automatic transmissions at Ford's Batavia (Ohio) Transmission
Plant.
    Ford Automotive Operations President and CEO-elect Jacques Nasser and ZF
Chief Executive Officer Dr. Klaus Bleyer made the announcement together at a
news conference.  ZF will own 51 percent of the new company and Ford the
remaining 49 percent.  The Batavia Plant will be owned by the joint venture,
but current employees will remain Ford employees working for the joint
venture.
    The new company is expected to begin operation in early 1999 and will
produce the highly sophisticated Continuously Variable Automatic Transmissions
(CVTs) for Ford and other automotive manufacturers worldwide.  The new CVT
will offer best-in-class functionality while increasing fuel economy by about
10 to 15 percent and improving driveability.  The Batavia Plant will continue
to make the present front-wheel-drive transaxle for the remainder of its
cycle.
    "We view this as an opportunity for growth with a company that is a
technical leader in transmissions," said Nasser.  "Ford will lend a skilled
workforce, high volume manufacturing expertise, and a first-rate plant in
Batavia.  Leveraging our resources was a key element to making this joint
venture an outstanding business proposition for Ford."
    "ZF will provide its CVT technology and technical expertise in automatic
transmission design and development," said Dr. Bleyer.  "ZF views this
partnership as an opportunity for growth and a chance to further demonstrate
the technical expertise that has long been a ZF trademark."
    In addition to its technical expertise, ZF also is contributing
undisclosed financial resources to the venture.
    The new company will be responsible for the development, production and
distribution of an estimated one million automatic CVT transmissions for cars
and light trucks worldwide.
    The CVT features two variable diameter pulleys connected by a metal belt,
which allows for the continuously variable ratio feature that allows the
driver to perceive "no shift."
    The Batavia Plant, which has 1,236 hourly and 212 salaried employees,
presently produces front-wheel-drive transaxles for Ford Contour and Mondeo,
Mercury Cougar and Mystique and the Mazda 626.  The plant opened in 1980.
    ZF is headquartered in Friedrichshafen, Germany and is a producer of
manual and automatic transmissions, chassis components, steering systems and
off-road driveline and axle systems.  It employs about 35,000 people.  ZF has
nine production facilities in North America, three of which have been
established since 1995.