Ford, Toyota in Talks on Cost-Cutting Alliance
Ford Motor Co., the No. 2 auto maker, said Thursday it held high-level talks with Japan’s Toyota Motor Corp. about forming a partnership or alliance to cut costs.
“Everyone is talking these days as companies continue to seek partnerships to cut costs and explore possible strategic alliances,” Ford spokesman Paul Wood said.
“We cannot disclose the details of these talks. We’re not going to deny that [Ford Chief Executive] Jacques Nasser and [Toyota Chairman Hiroshi] Okuda have met,” Wood added. “That’s simply the nature of the automotive business.”
Ford’s stock closed down 38 cents at $23.25 a share on the New York Stock Exchange, just above its 52-week low of $22.56 and off its high of $32.69. Toyota closed up 41 cents at $70.35 a share on NYSE, above its 52-week low of $67.71 and off its high of $108.25.
Japanese newspapers earlier reported Nasser and Okuda met last month in Tokyo and agreed to set up a team to investigate the feasibility of a wide-ranging alliance between two of the world’s largest auto makers.
Friday editions of Yomiuri Shimbun and Nihon Keizai Shimbun said the talks included joint development of a new small-sized passenger car for Europe, exchange of environmentally friendly technologies and sales of Ford’s cars in Japan.
Ford declined to reveal specifics of the talks, while Toyota U.S. officials declined to comment.
“It would probably make a lot of sense,” said Matt Greenberg, portfolio manager with Greenhaven Associates, a Purchase, N.Y.-based investment management firm that owns shares in Ford and GM. “Certainly from Ford’s perspective, it would be a good thing. Ford’s shareholders would probably view it positively.”
Auto makers have formed more strategic alliances in recent years to cut research and development costs to meet government regulations on fuel economy and emissions, and to cut costs on parts and supplies.
Such alliances have taken on added importance as the auto industry begins to slow in the United States and Europe, analysts said. Ford, General Motors Corp. and DaimlerChrysler’s Chrysler unit have recently cut back vehicle production at its North American plants as U.S. sales have slowed.
