Ford to sell 20% stake in Mazda

Ford Motor, scrambling for cash as the US Big Three automakers struggle to stay alive, will end 12 years of control of Mazda Motor Corp through the sale of a 20-per cent stake in the Japanese carmaker for around $540 million (Dh1.9 billion). Ford will remain Mazda's top shareholder with a stake of just over 13 per cent.

Mazda, in which Ford first took a stake in 1979, said yesterday it would buy back 6.87 per cent of its own shares from Ford for up to ¥17.9 billion ($640m), keeping them as treasury stock. More than 20 undisclosed business partners will purchase the remaining 13 per cent, Mazda said.

Reeling from slowing sales, Detroit's General Motors Corp, Ford and Chrysler are desperately trying to raise cash to survive in the worst economic crisis since the Great Depression. Executives from all three are expected to amplify their calls for a financial lifeline from the US Government at Congressional hearings that was to begin yesterday.

As part of the ownership change, Mazda said two board members – Chief Financial Officer David Friedman and Sales and Marketing Chief Daniel Morris – would return to Ford. Executive Vice-President Philip Spender will remain.

Mazda Chief Executive Hisakazu Imaki – the first Japanese CEO after a string of four Ford executives at the helm since 1996 – will cede his post to another executive vice-president, Takashi Yamanouchi, to become chairman of the board.

Slowing auto sales and the global financial crisis have sent shares of Ford plunging and led to a worse-than-expected $2.98bn operating loss in the latest quarter.

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