Ford Might Form Consortium to Control Kia

Ford Motor Co. and its Mazda Motor Corp. affiliate might form a consortium with other companies to acquire a controlling stake in Kia Motors Corp., the chairman of the insolvent South Korean auto maker said Tuesday.

Ford owns about 9% and Mazda owns about 7% of Kia, which has debt of $8.5 billion it can’t repay. A consortium could increase the stake to 51%, said Yoo Chong Ryul, who took over management last month on behalf of creditors.

“Ford is the only company that has made us an aggressive and confident proposal,” Yoo said at a news conference.

Ford executives have said they want to protect their investment, preserve the flow of vehicles the company receives from Kia and possibly use South Korea’s financial turmoil to boost sales and production in the country. They’ve also said they won’t boost the stake if it means shouldering Kia’s huge debt.

“We’re willing to do what we can to help Kia return to global competitiveness,” Ford spokesman John Spelich said. “Under certain circumstances, we’re willing to look at increasing our investment in Kia.” He declined to specify those conditions.

A Mazda spokesman in Tokyo declined to comment.

Yoo said he will meet with Ford’s vice chairman, Wayne Booker, in Tokyo to discuss the proposal. Kia’s final plan to raise more capital is expected to be unveiled by the end of July, a month ahead of schedule.

One sticking point is Kia’s labor union, whose 14,000 members went on strike for a second day Tuesday.

South Korea’s three other car companies--Hyundai Motor Co., Daewoo Motor Co. and Samsung Motor Inc.--have all expressed an interest in investing in Kia.

Yoo said South Korean companies would be unable to meet debt reduction targets mandated by the government if they acquire Kia.

Ford shares rose $4.13 to close at $57 on the New York Stock Exchange.