Ford May Sell Its 33.4-percent of Mazda

DaimlerChrysler is the poster child for this rule. Reaction to Saturday's news that General Motors is looking for a hook-up with Cerberus' Chrysler has been overwhelmingly negative, so far. The Wall Street Journal reports Monday that GM's board is "cool" to the idea of buying Chrysler, and rightly so. The likely scenario is that Cerberus, which has owned Chrysler for little more than a year, would sell its 81.1% interest (Cerberus recently told Daimler that it wants to buy the German automaker's remaining 18.9%) in the automaker to GM in exchange for GM's 49.9%t of GMAC. Cerberus owns 50.1 percent of GMAC.

I'm at a loss to explain why anyone would want to buy more interest in a mortgage/loan company right now.Who'd want to buy a car company, for that matter, at a time when liquidity for car loans has almost completely dried up? The Journal reports elsewhere that Ford Motor Company -- which earlier this year rejected GM's advances -- may try to sell its 33.4% controlling interest in Mazda. Selling Mazda would seem to be easier than, say, GM's attempts to unload Hummer. Mazda builds mostly fuel-efficient small and medium-size cars with EPA numbers in the 20s and 30s, like the Mazda3, Mazda6, and MX-5 Miata. And that controlling interest in Mazda is one of the few assets that FoMoCo didn't take to the pawnshop in its $24 billion fundraiser of 2006.

Downside is that Ford and Mazda do a lot of platform-sharing, including Fiesta/Mazda2, Edge/CX-7 and Fusion/Mazda6. And Ford/Mazda's joint venture Flat Rock, Michigan, factory is flexible enough to build front-drive Mazda6s alongside rear-drive Mustangs.Selling Mazda would raise much-needed cash for Ford. Similarly, if GM can find a buyer for its minority share of GMAC, it would provide a bit more operating capital. Analysts say, though, that its share of GMAC is worth about $6- to $7-billion, which would maybe buy it an extra fiscal quarter. And in light of how bad the financial crisis got last week, it's hard to think of anyone GM or Ford could find who is willing or able to buy up such assets these days.