Ford considers selling Mazda stake

[Dino Scuderia]

Jumping off the sinking Ford ship.

"Billionaire investor Kirk Kerkorian is pulling out of Ford Motor after becoming the largest individual shareholder outside the Ford family."

WSJ

[IBrake4Rainbows]

Stupid man.

He invests incorrectly. and this is just going to lower the share price because they'll be more shares kicking around.

Is it because they didn't accept him buying the company at a discount or something? didn't he try this caper with Chrysler?

[Dino Scuderia]

Yes, he did mess around in Chrysler too in the 90's.

[cmcpokey]

and he tried to do it a year ago with GM

[Ferrer]

Stupid man.

Defenitely.

Buying high(ish) selling low? Where did he learn that?

[fpv_gtho]

Unfortunately Ford will take a hit from that in some form, so its not just some misguided stockholder losing out.

[Dino Scuderia]

Defenitely.

Buying high(ish) selling low? Where did he learn that?

You always hope your investments will increase but they don't always. Conversely he could hold on to Ford until he loses millions more or it goes to zero. He's already down 12 billion in his MGM holdings which is where most of his money is.

These kinds of investor losses are very common right now in the midst of the sudden financial downturn. Worth billions one day, not so much the next....every day counts.

[Ferrer]

You always hope your investments will increase but they don't always. Conversely he could hold on to Ford until he loses millions more or it goes to zero. He's already down 12 billion in his MGM holdings which is where most of his money is.

These kinds of investor losses are very common right now in the midst of the sudden financial downturn. Worth billions one day, not so much the next....every day counts.

True. But Ford? I doubt it did make much sense back in April either.

[IBrake4Rainbows]

Any investment firm, worth there salt or otherwise, saw that Ford was not worth putting any large sum of money into if you were looking for any kind of return - long or short term.

Kerkorian does it because he can, I imagine.

[LeonOfTheDead]

the fact is that when you are loosing money, you can gain something in taxes' reductions and other helps from the government, so it could have a sense, but a sense we can hardly understand.

(same for MB selling Chrysler at a fraction of the original price, for example)

[Dino Scuderia]

Ford Sells $540 Million of Mazda Stock to Ease Crunch (Update1)

By Makiko Kitamura

Nov. 18 (Bloomberg) -- Ford Motor Co., reeling from plunging U.S. car sales and a sinking share price, will raise about $540 million selling part of its stake in Japanese affiliate Mazda Motor Corp. to ease cash concerns.

The automaker will sell 20 percent of Mazda tomorrow, reducing its holdings to 13 percent, Ford said in a statement today. Hiroshima-based Mazda will buy back up to a 6.9 percent stake for as much as 17.9 billion yen ($186 million), it said separately. The remainder of the shares will be bought by unidentified ``strategic business partners.''

Ford, which rescued Mazda from bankruptcy 12 years ago, will raise cash from the sale as the credit crunch makes borrowing more difficult. The Dearborn, Michigan-based automaker, General Motors Corp. and Chrysler LLC, are seeking a combined $25 billion in U.S. government loans.

``When the airplane is too heavy and you're losing power, you have to throw out what you can,'' said Edwin Merner, president of Atlantis Investment Research Corp. in Tokyo, whose parent company manages about $3.1 billion. ``It's a desperate, desperate situation.''

Ford's U.S. sales plunged 28 percent in October, as the industry heads to the lowest annual tally in 15 years. Ford Chief Executive Officer Alan Mulally, GM's Richard Wagoner and Chrysler's Robert Nardelli are scheduled to testify today at a Senate Banking Committee hearing.

Debt Market

Ford, along with GMAC LLC and Chrysler, has been shut out of the market for bonds backed by auto loans. Ford's last public sale of bonds backed by auto loans, a $5.3 billion offering on May 16, cost the automaker 47 times the interest it paid on a comparable sale a year earlier.

The Mazda stake sale ``allows Ford to raise capital that will help fund our product-led transformation,'' Mulally said in a statement.

Ford's sale of Mazda shares follows General Motors Corp.'s sale of its 3 percent stake in Suzuki Motor Corp. today for 22.4 billion yen.

Ford has owned a stake in Japan's fifth-largest automaker since 1979. The companies jointly own factories and Ford has based midsized models such as the Fusion sedan on the Mazda6.

Mazda Management

Mazda named Takashi Yamanouchi as its new president as of tomorrow, replacing Hisakazu Imaki. The company cited Ford's stake sale for the change in management. Chief Financial Officer David Friedman and board member Daniel Morris will also leave the company. Mazda named Kiyoshi Ozaki as the new chief financial officer.

Ford's shares have tumbled 74 percent this year. They slid 8 cents, or 4.4 percent, to $1.72 yesterday in New York Stock Exchange composite trading.

Mazda, which has slumped 67 percent this year, rose 6.4 percent to close at 184 yen today on the Tokyo Stock Exchange.

Ford in May retreated from a goal of a 2009 profit and hasn't set a new target. It has also withdrawn estimates of how much cash it will use from $23.4 billion it borrowed in 2006 to pay for cutting jobs, plant closings and new-model development.

The carmaker sold its Jaguar and Land Rover luxury units to India's Tata Motors Ltd. for about $2.4 billion in June.

Ford formed an automatic-transmission joint venture with Mazda in 1969 and acquired a 25 percent stake in the Japanese automaker in 1979. Ford took effective control of Mazda in May 1996, raising its stake to 33.4 percent. Suffering from debt and excess capacity, Mazda lost 102 billion yen in the three years through March 1996.

To contact the reporter on this story: Makiko Kitamura in Tokyo at [email protected].

Bloomberg.com: Asia

[IBrake4Rainbows]

Mistake.......

Although they need to free up some cash, Mazda are pretty much the only thing that keeps Ford cars interesting - they have the R&D know how to make the average exciting.

I see bad things in Fords Future....I really do.

[fpv_gtho]

They can still leverage Mazda's resources though.

[LeonOfTheDead]

Mistake.......

Although they need to free up some cash, Mazda are pretty much the only thing that keeps Ford cars interesting - they have the R&D know how to make the average exciting.

I see bad things in Fords Future....I really do.

agree, the near term future is going to be safe, maybe, but after that, say hi to boring cars.

[IBrake4Rainbows]

Thats exactly the point - for nearly 30 years now Ford US have been consistently selling vehicles that underwhelm or merely complete their alloted tasks adequately. There are a few blips of a pulse but for the most part they are simply flatlining product wise.

The biggest problem, as I see it, is because they often try to build to American standards, if that makes sense - what they consider the American consumer is willing to tolerate, in Interior quality, reliability, styling.....

Make vehicles that are of a world quality.

The other major problem, and this has been touched upon a few times, is that Ford means different things in different parts of the world, whereas a company like Mercedes Benz has the same brand strategy worldwide. Because of this muddled business model it is difficult to create vehicles to appeal to every market. However it is not difficult to revise what a brand stands for in the publics mind - get the advertising & product right, and people will buy it.

I'm just fearful, for many of these behemoth companies, that evolution will be too great a task to take on, and they'll simply collapse under their own weight.