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Wednesday, November 19, 2008

Ford Sets Mazda Free

DETROIT - Nobody drinks bubbly in this economy. Still, I'd bet champagne corks are popping at Mazda offices around the world with news that Ford Motor Company will sell about 20% of its controlling interest. The deal gives Ford about $540 million and reduces its share in Mazda to roughly 13%, far below controlling interest (33 1/3%) by Japanese law.

As you've read on Wide Open Throttle, the sale of Mazda stock will not affect deals between Ford and Mazda. They share Mazda's B-car platform in the Mazda2 and Ford Fiesta. Now Mazda can decide, on its own, whether it wants to import the 2 for sale in North America. They also share a platform in the Mazda3 and global Ford Focus, which means the Volvo C30 and S40/V50 as well, and the Mazda6 is the basis for a host of midsize Fords, from the Fusion/Milan/MKZ to the Edge and MKX. Finally, North American-market front-drive Mazda6s are built in the same Flat Rock, Michigan, factory as the rear-drive Ford Mustang.

Platform sharing is good for tiny automaker Mazda, as well, because it gets parts via a big, powerful buyer. Mazda, which has a modest, but faithful following in Europe as well as North America and Asia, is hurting as badly as the rest of the automobile market right now. Its long-term prospects are better, because it has a similar lineup to Honda's -- minus a luxury division. Compact and midsize sedans like the 3 and the 6 will be key to its success. The two crossovers, CX-7 and CX-9, will do as well as anything that big in the market, and the MX-5 Miata and RX-8 sports cars continue to serve as the spiritual basis for the automaker, its raison d'etre.

So why is the champagne likely to be flowing at Mazda's offices? Since Ford bought its interest in the late-'70s (necessary to Mazda's survival, since it had invested heavily in fuel-inefficient Wankel rotary-powered cars), Mazda has been a reluctant stepchild. It's a small, innovative company that can do more interesting things on its own. This is good news for Ford, too, which gets leaner and returns to its popular-car roots, with Ford and Lincoln-Mercury (and still, Volvo) at the core of its business. Even as it struggles to survive, Ford has all but vanquished the Jac Nasser legacy. Mazda will be a strong, little niche player that will continue to serve enthusiasts well.