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Ford's Fleming says he's happy with Mazda tie-up

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Ford's Fleming says he's happy with Mazda tie-up

Automotive News -- September 9, 2010 - 9:01 am ET

DETROIT (Reuters) -- Ford Motor Co., which owns 11 percent of Mazda Motor Corp., has not yet fully discussed its long-term relationship with the Japanese automaker, but is pleased with the current setup, a top executive said today.

Ford global manufacturing and labor affairs chief John Fleming said his company and Mazda would continue to share manufacturing opportunities, which he said present themselves two or three times a year, but he shied away from making predictions on the longer-term relationship.

Fleming said Ford and Mazda would work together on a "project-by-project" basis.

"What happens longer-term? I think that's still to be discussed, decided," Fleming told a UBS conference in London that was available live online. "Right now, I think we're happy with where we are with Mazda."

Ford sold its controlling stake in Mazda two years ago to free up cash, but remains the largest shareholder. The stake was reduced to 13 percent from one-third ownership in late 2008, and later to 11 percent when Mazda issued more shares to raise cash for investing in hybrid and other technologies.

Thailand tie-up

Fleming emphasized the active tie-up of the companies, saying they are partners in a $350 million investment in a Thailand plant to build the next generation of compact pickup trucks. Production is to start in mid-2011.

Two months ago, Ford and Mazda opened a $500 million plant in Thailand to build Ford Fiesta and Mazda2 passenger cars.

Fleming reiterated Ford's outlook for a stronger balance sheet and profitability, saying that by the end of 2011, the company's automotive operations will move into a net cash position from their current net debt standing.

He also said Ford expects to improve overall profitability in 2011.

Ford's net losses totaled $30 billion from 2006 through 2008, but the company has transformed itself during the industry's worst slump in its home North American market in more than two decades. It has shown net profits for the last five quarters.

Since 2005, Ford has cut its North American production capacity by 40 percent, Fleming said, and reduced the number of hourly and salaried employees by 40 percent to 50 percent.

"We are moving as a company from survival to growth," said Fleming, who joined Ford in England in 1967.

10% growth predicted

Ford expects the global automotive market will expand by 5 percent to 10 percent in 2010 as the worldwide economic recovery takes hold, Fleming said.

Asian markets, where growth is moderating, remain strong, he said.

In Europe and the U.S., consumer spending will revive slowly from “below-trend” levels as central banks offer cheap credit to encourage buying, he said.

“The economy is improving, but the strength of the recovery is uneven,” with “weaker” markets in Europe as government incentives for auto sales expire, Fleming said. An industrywide capacity “shakeout” is likely in the region, where vehicle pricing remains under pressure, he said.

Fleming, the former CEO of Ford of Europe, took his current position in August, when Ford completed the sale of its Gothenburg, Sweden-based Volvo Cars brand to Zhejiang Geely Holding Group Co. Ford also plans to eliminate the Mercury line in the U.S. by the end of this year.

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100909/COPY01/309099974/1179#ixzz0z4fCYfIS

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