Mazda 6, Ford Mustang Plant Is Final Custody Issue In A Relatively Quiet Corporate Divorce

June 3, 2011
2010 Mazda Mazda6

2010 Mazda Mazda6

Ford built an automotive plant at Flat Rock, Michigan, in 1972; back then, the facility was the most advanced casting plant in the world. Labor troubles and decreasing demand for V-8 engines led Ford to shutter the plant in 1981, and the facility sat vacant for several years. Fast forward to 1987, when Mazda purchased the facility and opened it as Mazda Motor Manufacturing USA, where the automaker planned to build the Mazda 626 and MX-6 alongside the Ford Probe. By 1992, Ford had purchased a 50-percent share of the plant, which was then renamed AutoAlliance International.

Today, the plant builds Ford Mustangs alongside Mazda 6 sedans. Weak demand for Mazda’s mid-size sedan has limited production to just 45,000 units annually, less than half of the 100,000 units Mazda had projected after the car’s 2008 redesign, and less than 38 percent of Mazda’s production capacity at the plant.. A strong yen has also hurt the automaker, which imports most of their products from Japan,  leading to a loss of $105 million in North America last fiscal year. Simply put, Mazda needs to find a way to cut their losses, and selling their share in AutoAlliance International may be the most obvious choice.

According to a third-party source, Mazda is considering construction of a new plant in Mexico to lower production costs. Mazda is silent on the subject and has also declined to comment on reports of a split with Ford at Flat Rock, saying only, “Mazda and Ford are studying various possibilities for AAI, and we have nothing to announce at this time. We do not comment on speculation.”

[Wall Street Journal, The Detroit News]

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