Ford Motor Company will end its 12 years of control on Mazda Motor Corporation through the sale of its 20 percent stake in the company. The latest move by the US carmaker is the latest sign in the block that the Big Three in the United States are all scrambling to raise cash. Ford first invested in Mazda stocks in 1979.
Mazda in a statement said that it would buy back 6.87 percent of its own shares from Ford for up to $185 million. More than 20 business partners will purchase the remaining 13 percent. The moves by Ford, Chrysler LLC and General Motors in recent weeks are a manifestation that the industry is reeling from slowing sales. These companies agree that this could be the worst economic crisis since the Great Depression.
As part of the ownership change, Mazda said that two board members would return to Ford. The current Mazda Chief Executive Hisakazu Imaki, the first Japanese CEO after a string of four Ford executives will cede his post to another executive vice president. When the sale is completed, Ford Motor Company will raise $538 million. In a statement, Ford CEO Alan Mulally said that this will allow Ford to raise capital that will help fund the company’s product-led transformation and will allow Ford and Mazda to continue their successful strategic relationship.