Ford to sell their shares of Mazda?
10-19-08, 11:50 AM
#1
Ford to sell their shares of Mazda?
Form Autoblog.com
While GM is being swamped with the persistent rumors surrounding the addition/dissolution of Chrysler, Ford's rumor mill has been heading in the complete opposite direction. It appears Volvo is on the way out of Dearborn, but Mazda may be sneaking through the exit first. Recent reports since disputed by Mazda have Ford selling off a portion of its 33.4% stake in the Japanese automaker, which means the Blue Oval would lose majority ownership status. The Nikkei daily in Japan has been all over the Ford/Mazda story, and the latest news involves selling 20% of Mazda to 20 Japanese firms including some insurance companies, leaving Ford with a stake of around 13%.
Ford is allegedly unwilling to sell the shares to its competition, so splitting the Mazda shares in 20 small chunks makes picking up all the shares difficult. Besides five insurance companies, parts maker Denso, steel companies, and trading companies are also rumored to be taking part in the purchase. The price of 1% Mazda ownership is in the neighborhood of $40 million, and the total sale could approach $1 billion. Japanese media is reporting that any deal could be announced next month, and neither Mazda or Ford are saying a word at this point.
[Source: Automotive News - Sub. Req.]
Would this be good for Mazda in the Future? Let's hear it....
While GM is being swamped with the persistent rumors surrounding the addition/dissolution of Chrysler, Ford's rumor mill has been heading in the complete opposite direction. It appears Volvo is on the way out of Dearborn, but Mazda may be sneaking through the exit first. Recent reports since disputed by Mazda have Ford selling off a portion of its 33.4% stake in the Japanese automaker, which means the Blue Oval would lose majority ownership status. The Nikkei daily in Japan has been all over the Ford/Mazda story, and the latest news involves selling 20% of Mazda to 20 Japanese firms including some insurance companies, leaving Ford with a stake of around 13%.
Ford is allegedly unwilling to sell the shares to its competition, so splitting the Mazda shares in 20 small chunks makes picking up all the shares difficult. Besides five insurance companies, parts maker Denso, steel companies, and trading companies are also rumored to be taking part in the purchase. The price of 1% Mazda ownership is in the neighborhood of $40 million, and the total sale could approach $1 billion. Japanese media is reporting that any deal could be announced next month, and neither Mazda or Ford are saying a word at this point.
[Source: Automotive News - Sub. Req.]
Would this be good for Mazda in the Future? Let's hear it....
10-19-08, 04:14 PM
#2
I'm thinking it would be good. I'm not an economist nor do I have any relevant knowledge to the topic, but it seems to me that it would be good for Mazda. I mean someone else is buying the stocks so it's not like they're losing money, but they are gaining more control over MNAO since Ford won't have a controlling share.
I could see some really awesome stuff coming from this since they're free to innovate without the controlling hand of Ford getting in the way of their North American operations.
What does everyone else think?
Jon
I could see some really awesome stuff coming from this since they're free to innovate without the controlling hand of Ford getting in the way of their North American operations.
What does everyone else think?
Jon
10-19-08, 07:09 PM
#3
More Mazdas than Sense
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Long term: Bad.
Mazda works because they can develop their mainstream platforms and drivetrains on Ford's dime (See: Mazda3, Mazda6, DISI), and do the fun stuff on their own (rotary, miata, etc.)
Without Daddy Fordbucks bankrolling the mainstream part of the operation, I can't see Mazda having the resources to play in the fun end of the pool for long.
In a world where Honda is a small car company, with limited product development resources, Mazda will eventually be snapped up by someone, or significantly change their product line to focus on "volume products".
Mazda works because they can develop their mainstream platforms and drivetrains on Ford's dime (See: Mazda3, Mazda6, DISI), and do the fun stuff on their own (rotary, miata, etc.)
Without Daddy Fordbucks bankrolling the mainstream part of the operation, I can't see Mazda having the resources to play in the fun end of the pool for long.
In a world where Honda is a small car company, with limited product development resources, Mazda will eventually be snapped up by someone, or significantly change their product line to focus on "volume products".
10-19-08, 09:40 PM
#5
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I didn't realize how poor Mazda's market capitalization was until reading this. The company is only worth $4.1B (nearly the same as Ford`s), but last year made a profit of $715.5M. That market cap seems low. Mazda is a nice source of profit for Ford, but they obviously need short term cash.
I read an article in the Economist that suggested that while it was difficult to understand why GM would want to merge with Chrysler, their prime motivation was that Chrysler is sitting on $11B worth of cash from loans. GM needs cash to prevent bankruptcy and might be willing to make an utterly stupid move simply for the chance to fight another day. If GM would consider that, surely Ford might sell off Mazda for cash.
I seriously think the smarter thing for Ford`s board to do would be to try to sell off the Ford stuff assets and use that to buy more Mazda stock.
As mentioned, economies of scale are the only thing that Mazda gets from working with Ford. Mazda develops the sub 3L displacement engines and the cost is spread between Mazda and Ford. Mazda develops the 3 and 6 platform and that gets spread among Volvo, Ford and Mazda. Ford develops the V6s that Mazda sells few of. That might mean that it`s not economical to develop an engine for low volume vehicles (V6 6 and CX-9). The DISI engine has no Ford application. I think in North America Mazda primarily sells the 3 and the CX-7. None of the others are sold in sufficient volume\have sufficent gross profit to make Mazda much money.
I read an article in the Economist that suggested that while it was difficult to understand why GM would want to merge with Chrysler, their prime motivation was that Chrysler is sitting on $11B worth of cash from loans. GM needs cash to prevent bankruptcy and might be willing to make an utterly stupid move simply for the chance to fight another day. If GM would consider that, surely Ford might sell off Mazda for cash.
I seriously think the smarter thing for Ford`s board to do would be to try to sell off the Ford stuff assets and use that to buy more Mazda stock.
As mentioned, economies of scale are the only thing that Mazda gets from working with Ford. Mazda develops the sub 3L displacement engines and the cost is spread between Mazda and Ford. Mazda develops the 3 and 6 platform and that gets spread among Volvo, Ford and Mazda. Ford develops the V6s that Mazda sells few of. That might mean that it`s not economical to develop an engine for low volume vehicles (V6 6 and CX-9). The DISI engine has no Ford application. I think in North America Mazda primarily sells the 3 and the CX-7. None of the others are sold in sufficient volume\have sufficent gross profit to make Mazda much money.
Last edited by Snrub; 10-19-08 at 09:42 PM.
10-20-08, 03:55 PM
#6
Go Hard....or Go Home
For those of you who don't know, the split is on its way. Mazda Canada Credit as of Oct 1 is no more. They will continue to administrate current leases/financing but arent writing any more paper. In the USA, MMC is now using Chase Bank I believe for its financing. From what I have heard is Mazda will buy back Fords 33%. Ford needs the operating capital as does GM, everything is for sale right now! lol
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10-20-08, 09:22 PM
#8
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For those of you who don't know, the split is on its way. Mazda Canada Credit as of Oct 1 is no more. They will continue to administrate current leases/financing but arent writing any more paper. In the USA, MMC is now using Chase Bank I believe for its financing. From what I have heard is Mazda will buy back Fords 33%. Ford needs the operating capital as does GM, everything is for sale right now! lol
10-21-08, 07:50 PM
#9
That might mean that it`s not economical to develop an engine for low volume vehicles (V6 6 and CX-9). The DISI engine has no Ford application. I think in North America Mazda primarily sells the 3 and the CX-7. None of the others are sold in sufficient volume\have sufficent gross profit to make Mazda much money.