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Will Mazda Abandon Michigan Assembly Plant?

Maker could turn factory over to Ford.

by on Feb.21, 2011

Mazda may seen be looking for a new place to build the midsize Mazda6 sedan.

Continuing to unwind their decades-old relationship, Mazda Motors is considering whether to walk away from the Michigan assembly plant it operates as part of a joint venture with Ford Motor Co.

The move would be the latest in a generally genial corporate divorce that was triggered by Ford’s decision to sell off most of its stake in Mazda, last year.  At one point, the U.S. maker was the dominant shareholder in its Japanese partner, but Ford now holds just a 3.5% stake.

A final decision on whether to maintain the AutoAlliance International joint venture will be announced later this year, said Mazda Chief Financial Officer Kiyoshi Ozaki.  If Mazda does pull out of the two-decade-old Flat Rock plant the future of the factory would be left in jeopardy, industry observers warn.

The factory has the capacity to produce 240,000 vehicles annually, and needs to build at least 170,000 to break even, according to Ozaki.  But last year it produced just 114,000 – 36,000 Mazda6 sedans and 78,000 Ford Mustangs.