What Happens To Mazda Without Ford?
Barring a last-minute hitch, it looks like Ford and Mazda will soon be severing the ties that have bound them for the last four decades. Though the U.S. maker has yet to issue a formal confirmation, it's negotiating a deal that would have it sell off most or all of the remaining 11 percent stake it holds in its Japanese affiliate.
And, perhaps most importantly, they'll likely curb future product development programs that helped both companies squeak through the hard times of the not-too-distant past. One of the earliest examples of that alliance was the old Ford Escort, the U.S. maker's first attempt to build a so-called "world car."
More recent examples include the B-car platform that eventually went on to become both the Ford Fiesta and Mazda2. Conventional wisdom is that these are virtually identical subcompacts – but as I was reminded during back-to-back drives this past week, there's a surprising amount of difference between the American and Japanese production vehicles. Though they may have started out working together, the two companies soon branched off, yielding some surprisingly different results in terms of design and, more importantly, driving dynamics.
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Paul A. Eisenstein is Publisher of TheDetroitBureau.com, and a 30-year veteran of the automotive beat. His editorials bring his unique perspective and deep understanding of the auto world to Autoblog readers on a regular basis.
The Ford/Mazda relationship dates back to 1969, when they began a joint venture to manufacture automatic transmissions. A decade later, Ford purchased a 25% stake, which eventually grew to 33.4%.
Ford was Mazda's Western white knight. The Japanese maker has had an unpleasant habit of walking perilously close to the abyss, and in the late 1990s, it foolishly tried to copy the Asian giant, Toyota, by rolling out a flood of new products and even contemplating its own luxury network, to be dubbed Amati. Problem was, a senior official admitted to me at the time, Mazda didn't have the money to market those new products. As one new model hit showrooms, the maker had to abandon an earlier offering, and in the end, sales actually plunged, nearly bankrupting the Japanese maker.
Effectively taking charge, Ford appointed the first gaijin to run a major Japanese company. The six-foot, five-inch Henry Wallace became something of a demi-god in a country that normally looked down on foreigners. And, through a succession of Ford-appointed execs to follow – including Mark Fields, today Ford's President of the Americas – Mazda's health steadily rebounded.
Almost everywhere, anyway. What has always surprised serious automotive aficionados is the maker's relative inability to make solid gains in the U.S. While Mazda is now one of the strongest brands in Canada, where it holds a roughly five percent share, it is still a relative also-ran here, at barely two percent. American chief executive Jim O'Sullivan is aiming to boost that to somewhere between three and four percent, but considering the company's well-regarded array of products like the Mazda6 and CX-7, one has to wonder why it can't double that number again.
It's all the more confounding when you consider that few companies other than luxury marque BMW have done a better job establishing their brand image. The zoom-zoom tagline is an advertising icon – and will be carefully maintained even though Mazda recently bounced long-time ad agency Doner.
Fans of the brand can only hope. But Mazda has clearly built up a good foundation – in the form of some solid vehicle platforms and a very clear brand strategy – that should carry it forward.
As for Ford, global product czar Derrick Kuzak visibly bristles when an interviewer suggests that new models like Fiesta and Focus are just rebadged Mazdas. Yes, he'll accede, they did start out with some fundamentals in common, but the two makers quickly went back to their own engineering centers to bring those models to production, leaving only a faint trace of common DNA.
CEO Alan Mulally has been driving the separation between Ford and Mazda, having previously reduced the U.S. makers stake to 13 percent shortly after he came to Dearborn in late 2007. It's all part of his One Ford strategy, a concentration on the core Blue Oval that has also led to the sale of Aston Martin, Jaguar, Land Rover and Volvo and the closing of long-failing Mercury.
With fewer marques to concentrate on, and a strategy of sharing platforms worldwide, Ford can trim overall costs quite sharply and, so it insists, develop future products in-house that absolutely capture the essence of its two remaining brands: Ford and Lincoln.
Ironically, the decision to sever their ties comes just as other makers around the world are stepping up their alliances and cross-platform sharing. Even Daimler AG, which shocked the automotive world by announcing a tie-up with the Renault-Nissan alliance.
Of course, nothing is final until the signatures are on the contract, as one Ford insider emphasized during a recent conversation. Ford's planned sell-off of its remaining Mazda stake could still be scuttled. But that seems increasingly unlikely with every day that passes. And one of the oldest and most extensive relationships in the auto industry seems likely to fade into history before the end of the year.
[Images: (lead) David McNew/Getty, Frank Polich/Getty, Scott Olson/Getty]
Paul A. Eisenstein is Publisher of TheDetroitBureau.com, and a 30-year veteran of the automotive beat. His editorials bring his unique perspective and deep understanding of the auto world to Autoblog readers on a regular basis.
Barring a last-minute hitch, it looks like Ford and Mazda will soon be severing the ties that have bound them for the last four decades. Though the U.S. maker has yet to issue a formal confirmation, it's negotiating a deal that would have it sell off most or all of the remaining 11 percent stake it holds in its Japanese affiliate.
It appears that Mazda is as eager as Ford to go its own way.
No, it isn't a bitter divorce. Ford and Mazda will likely still maintain some ties – in Thailand, for example, where their suburban Bangkok plant has just begun producing an all-new generation of compact pickup trucks, including the Ford Ranger. But the two makers are already unwinding their manufacturing alliance in booming China.
And, perhaps most importantly, they'll likely curb future product development programs that helped both companies squeak through the hard times of the not-too-distant past. One of the earliest examples of that alliance was the old Ford Escort, the U.S. maker's first attempt to build a so-called "world car."
More recent examples include the B-car platform that eventually went on to become both the Ford Fiesta and Mazda2. Conventional wisdom is that these are virtually identical subcompacts – but as I was reminded during back-to-back drives this past week, there's a surprising amount of difference between the American and Japanese production vehicles. Though they may have started out working together, the two companies soon branched off, yielding some surprisingly different results in terms of design and, more importantly, driving dynamics.
Continue reading...
Paul A. Eisenstein is Publisher of TheDetroitBureau.com, and a 30-year veteran of the automotive beat. His editorials bring his unique perspective and deep understanding of the auto world to Autoblog readers on a regular basis.
The Ford/Mazda relationship dates back to 1969, when they began a joint venture to manufacture automatic transmissions. A decade later, Ford purchased a 25% stake, which eventually grew to 33.4%.
Ford was Mazda's Western white knight. The Japanese maker has had an unpleasant habit of walking perilously close to the abyss, and in the late 1990s, it foolishly tried to copy the Asian giant, Toyota, by rolling out a flood of new products and even contemplating its own luxury network, to be dubbed Amati. Problem was, a senior official admitted to me at the time, Mazda didn't have the money to market those new products. As one new model hit showrooms, the maker had to abandon an earlier offering, and in the end, sales actually plunged, nearly bankrupting the Japanese maker.
Effectively taking charge, Ford appointed the first gaijin to run a major Japanese company. The six-foot, five-inch Henry Wallace became something of a demi-god in a country that normally looked down on foreigners. And, through a succession of Ford-appointed execs to follow – including Mark Fields, today Ford's President of the Americas – Mazda's health steadily rebounded.
Almost everywhere, anyway. What has always surprised serious automotive aficionados is the maker's relative inability to make solid gains in the U.S. While Mazda is now one of the strongest brands in Canada, where it holds a roughly five percent share, it is still a relative also-ran here, at barely two percent. American chief executive Jim O'Sullivan is aiming to boost that to somewhere between three and four percent, but considering the company's well-regarded array of products like the Mazda6 and CX-7, one has to wonder why it can't double that number again.
It's all the more confounding when you consider that few companies other than luxury marque BMW have done a better job establishing their brand image. The zoom-zoom tagline is an advertising icon – and will be carefully maintained even though Mazda recently bounced long-time ad agency Doner.
Ford's Derrick Kuzak bristles at the suggestion the Fiesta and Focus are rebadged Mazdas.
The good news is that its global success has put Mazda in a position to weather what might have been the devastating blow of Ford's departure. Indeed, it appears the Japanese maker is as eager as its Dearborn counterpart to go its own way.
Fans of the brand can only hope. But Mazda has clearly built up a good foundation – in the form of some solid vehicle platforms and a very clear brand strategy – that should carry it forward.
As for Ford, global product czar Derrick Kuzak visibly bristles when an interviewer suggests that new models like Fiesta and Focus are just rebadged Mazdas. Yes, he'll accede, they did start out with some fundamentals in common, but the two makers quickly went back to their own engineering centers to bring those models to production, leaving only a faint trace of common DNA.
CEO Alan Mulally has been driving the separation between Ford and Mazda, having previously reduced the U.S. makers stake to 13 percent shortly after he came to Dearborn in late 2007. It's all part of his One Ford strategy, a concentration on the core Blue Oval that has also led to the sale of Aston Martin, Jaguar, Land Rover and Volvo and the closing of long-failing Mercury.
With fewer marques to concentrate on, and a strategy of sharing platforms worldwide, Ford can trim overall costs quite sharply and, so it insists, develop future products in-house that absolutely capture the essence of its two remaining brands: Ford and Lincoln.
Ironically, the decision to sever their ties comes just as other makers around the world are stepping up their alliances and cross-platform sharing. Even Daimler AG, which shocked the automotive world by announcing a tie-up with the Renault-Nissan alliance.
Of course, nothing is final until the signatures are on the contract, as one Ford insider emphasized during a recent conversation. Ford's planned sell-off of its remaining Mazda stake could still be scuttled. But that seems increasingly unlikely with every day that passes. And one of the oldest and most extensive relationships in the auto industry seems likely to fade into history before the end of the year.
[Images: (lead) David McNew/Getty, Frank Polich/Getty, Scott Olson/Getty]
Paul A. Eisenstein is Publisher of TheDetroitBureau.com, and a 30-year veteran of the automotive beat. His editorials bring his unique perspective and deep understanding of the auto world to Autoblog readers on a regular basis.
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