When Mazda was down and out, Ford came to the rescue. Is it payback time?
Ford Motor Co.'s car business lost $1 billion last quarter. But Mazda -- in which Ford has a 33.4 percent stake -- is heading for a second year of record profits, thanks to a restructuring led by Ford.
Asked at a press conference whether Mazda might say thank you by boosting its dividend -- an easy way to pass some cash to Ford -- Mazda CFO Gideon Wolthers danced around the issue: "As we get a more solid earnings momentum and as our balance sheet improves, we recognize the need to look at our dividend policy and more appropriately reward our investors." He added: "There is no request, no need and no plans for Mazda to give assistance to Ford."
Wolthers joined Mazda in 2001 from Ford, where he was a controller in product development.
Last year Mazda paid a dividend of 3 yen -- or about 2.5 cents --a share. That meant a payment of about $10.4 million to Ford. Raising the dividend another 1 yen a share would give Ford only $3.5 million more.
Would the relative pittance Ford might receive be worth the risk to Mazda? Though profitable now, Mazda may be too recently off its sickbed to offer Ford a transfusion.
A better approach might be for Mazda, which is short of capacity, to buy a plant from Ford -- say the one in St. Thomas, Ontario. That would help Mazda and also take care of one of the two unnamed Ford factories to be closed.