Mazda and Ford: A unique alliance
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Wallace, sent from Ford two years earlier, was about to become the first foreign president of a Japanese carmaker.
Wada hailed the closer ties, reviewed Mazda's financial performance and then invited questions. He did not introduce Wallace, or even acknowledge his presence.
Wallace ignored the slight. Eventually, responding to a Japanese reporter's question, Wallace laid out his plans for rebuilding Mazda as an independent carmaker, with a product program closely aligned with Ford's.
Over 32 years, the Mazda relationship has survived numerous slights, cultural gaffes and suspicions of the other's motives. Despite that, the two sometimes-fractious partners are steadily increasing cooperation.
Mazda has provided Ford with invaluable assistance in small-car engineering. And it has helped Ford learn how to work with an independent-minded affiliate.
Today, Ford senior managers who honed restructuring skills at Mazda are using the knowledge to return Ford to profitability.
Mazda began as a cork maker in 1920 called Toyo Cork Kogyo Co. Ltd. After branching into rock drills and machine tools, it began making small trucks in 1931. Ford initiated ties in 1971 by buying Mazda-built trucks for sale in Asia.
Henry Ford II approached the Hiroshima-based carmaker that year about buying a stake, but was turned down.
Gas guzzler
The oil crisis of 1973 exposed Mazda's defining technology, the rotary engine, as a gas guzzler. The company plunged into losses. Mazda's main creditor bank, Sumitomo Bank, replaced the founding family with its own managers and sought a tie-up with Ford.
Ford didn't agree then, but in 1979, just before the second energy crisis, it decided it wanted a 25 percent stake in a company with a lineup of proven small cars.
Despite numerous hurdles, Ford and Mazda moved closer, particularly in North America and Asia.
Both invested in Korea's Kia Motors. When Ford wanted to import the Kia Festiva for sale in the USA, Mazda sent engineers to Kia to help.
In contrast, Mazda and Ford of Europe rarely cooperated. Each saw the other as a rival - and was too proud to find ways to learn from the other. Ford of Europe's Escort never drew on Mazda's small-car expertise.
When Ford bought the controlling stake in Mazda, Japan's xenophobic press exploded. Ford's Western management would lay off thousands and ruin Mazda's engineering culture, the media warned.
There was no bloodbath, but Wallace and his team did introduce some Western management practices. They tightened Mazda's financial controls and improved marketing. They sold assets, trimmed Mazda's bloated lineup of low-volume models, and consolidated the five sales channels into two.
Slowly, the restructuring worked. In 1999, Mazda posted its first consolidated profit in six years, and has been profitable each year after 2000.
The relationship still has tough spots. Mazda's Japanese managers say Ford uses Mazda as training for rising executives who may not have Mazda's long-term interests at heart.
Ford managers in turn say Mazda executives are less willing to embrace radical change than those at Nissan under brash CEO Carlos Ghosn.
But both companies continue to cooperate, while each guards its uniqueness.
