Mazda plays bubble game with Flat Rock

TOKYO -- Don’t hold your breath for Mazda Motor Corp. to decide what to do about production at the Flat Rock, Mich., factory -- its only North American assembly plant.

The longer Mazda stalls, the more it helps its joint venture partner, Ford Motor Co., drive a hard bargain with the UAW, which represents workers at the plant. And the more pay is kept in check during this summer’s negotiations, the more it helps Mazda if the automaker decides to keep building cars there.

The future of the AutoAlliance International plant, a 50-50 joint venture between Mazda and Ford, was thrown into doubt when Mazda said last month it would stop building the Mazda6 sedan there after the current generation. That car’s life cycle is expected to end next year.

With Mazda mum about product plans after the Mazda6, the Flat Rock plant was immediately rechristened as a critical bubble factory at risk of losing jobs. Mazda cast more doubt on the factory’s future when it unveiled plans to build a plant in Mexico. That factory is expected to come online in 2013, right after the Mazda6 ends its run in Michigan.

Mazda says it is working hard to negotiate Flat Rock’s future with Ford.

But what does Mazda have to gain from rushing the matter? With the factory on the bubble, Ford has better leverage over the UAW in this summer’s contract talks.

If Mazda wants to continue building another model at Flat Rock after the Mazda6, it behooves the company to stack the negotiations against higher labor costs.

And if Mazda is negotiating with Ford to sell back its share of Flat Rock or pull out altogether, it also pays to hold out: Staying silent gives Ford an extra card to play in its own negotiations and could be an olive branch to Ford that helps grease Mazda’s retreat from the alliance.

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