Ford Motor Co. said it is ending one joint manufacturing venture with Japanese auto companies while continuing to make progress toward another -- a possible operating agreement with Toyota Motor Co. to produce vehicles in the United States.
An 11-year-old partnership between Ford and Nissan Motor Co. and Toyo Kogyo Ltd. will end Wednesday when Ford sells its 50 percent interest in the Japan Automatic transmissions to Ford's North American automotive operations between 1977 and 1979 but sold the bulk of the units to Nisan, Toyo Kogyo and Subaru.
Nissan asked to become the majority owner two years ago because it was the major purchaser, and Ford decided to get out of the business entirely, not wanting to become a minority shareholder, Ford officials said. Moreover, the plant's transmissions did not fit in with its future product plans, Ford said. With the sale, Nissan will own 65 percent and Toyo Kogyo 35 percent of the production plant. No purchase price was announced.
Ford officials denied published reports that the company has reached general agreement with Toyota to jointly produce vehicles in the United States. Newsweek reported that Ford and Toyota have decided on the basic type of auto they plan to produce together but are keeping that a secret until the joint venture finally is approved and announced, possibly in June.
A Ford spokesman said yesterday there has been no significant change in the Ford-Toyota negotiations in the past few months and that there still is no final agreement.
The two companies are "actively considering" building a vehicle designed by Toyota in one of Ford's assembly plants, presumably in the midwestern United States, with a target production of 300,0000 units annually, Ford said.
Newsweek reported that the Ford-Toyota vehicle is likely to be a high-mileage, four-passenger compact, built to compete with the General Motors Corp. "J" car, being introduced this spring. Ford has no new, front-wheel-drive compact to match GM's "J" car, and a point venture with Toyota would permit Ford to catch up much more quickly in the model line. However, Toyota officials have expressed interests in a mini-van rather than a new compact passenger car.
Ford officials said no decision has been made on the type of car that might be produced if a joint operating agreement is reached.
Ford officials also want Toyota to agree that 75 percent of a new vehicle's content would have to come from U.S. sources, minimizing the use of imported parts and components. That request could be a stumbling block in the negotiations, industry sources say.
Meanwhile, Moody's Investors Service lowered the ratings on Ford's six senior debt issues and other issues of the company and Ford Motor Credit Co., its auto financing unit, because of Ford's "continued losses and the deterioration of cash flow levels during the period of heavy capital expenditures."
The ratings on Ford's six senior debt issues and seven pollution-control issues were lowered from Double-A to Single-A. The rating agency also lowered ratings on Ford Motor Credit Co.'s 32 senior debt issues from Double-A to Single-A, dropped ratings on nine issues of subordinated debt from Single-A to BAA and revised four issues of medium-term notes from Double-A to Single-A. Moody's is maintaining the Prime-1 commercial paper rating on Ford Motor Credit Co. Similar rating changes were made last Oct. 28 by Standard & Poor's.