Mazda Corp. may pull out of car factory in Michigan

2/18/2011

TOKYO — Mazda Motor Corp. may pull out from a U.S. factory it operates jointly with Ford Motor Co. after production turned unprofitable, Chief Financial Officer Kiyoshi Ozaki said.

The company will announce plans for the factory in Flat Rock, Mich., by the middle of this year, Mr. Ozaki said yesterday. Mazda also may consider overhauling the plant or changing the models built there, he said, without elaboration.

Mazda, Japan's second-largest auto exporter, has been hurt by the yen's sustained rise against the U.S. dollar in recent months. The Hiroshima-based company's U.S. sales fell 9 percent in January, as increased incentives on Toyota Motor Corp.'s Corolla compact, and demand for Hyundai Motor Co.'s Elantra sapped demand for the Mazda3, Mr. Ozaki said.

A decision by Mazda to leave the plant shared with Ford since the 1980s "wouldn't catch Ford off-guard," said Kim Hill, an economist with the Center for Automotive Research in Ann Arbor. "If Mazda were to leave, Ford would probably want to look at putting something off its small-car platform in that facility," she said.

Ford declined to comment.

The Michigan plant needs to run at 70 percent of its full 240,000 annual capacity to make a profit, Mr. Ozaki said. The plant produced 54,000 cars last year.