In order to raise cash, Ford said on Nov. 17 it will sell a 20% stake in its partner Mazda for $540 million. Ford added it would continue a strategic alliance with Japan's fifth largest motor manufacturer after reducing its stake from 33.4% to about 13%.
"This agreement allows Ford to raise capital that will help fund our product-led transformation," Ford chief executive Alan Mulally said.
Mazda said it would spend up to 17.9 billion yen (US$185 million) to buy back 6.87% of its shares on the market. More than 20 companies will also buy the shares sold by Ford.
Mazda said it would replace its chief executive and president Hisakazu Imaki, who warned business was rapidly deteriorating. "The financial crisis drastically changed the environment," Imaki said. Mazda said vice president Takashi Yamanouchi would become chief executive and president effective on Nov. 19. Imaki will remain in the post of chairman.Yamanouchi warned Mazda faced a rough ride as weak sales and a stronger yen ate into profits.
Two directors sent to Mazda from Ford will leave, although Ford will remain the largest shareholder and keep one seat on Mazda's board of directors, with Philip Spender staying on as an executive vice president.
Ford invested in Mazda for the first time in 1979 and raised its stake to 33.4% in 1996 when the Japanese carmaker's business slumped. The two companies have since profited from the joint development of compact cars with Mazda recovering its financial health. Imaki said the companies would continue to enjoy a strategic relationship.
Copyright Agence France-Presse, 2008