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Stacy94PGT · 12-14-2005, 10:59

Ford plans $1 billion investment in Asia-Pacific

Reuters

BANGKOK -- Ford Motor Co. said Wednesday that it planned to invest $1 billion in products and plants in the Asia-Pacific region in the next several years to maintain its presence in fast-growing markets.

Ford COO Jim Padilla said China, India and Thailand are his company's main markets in Asia, where Ford has already invested $2 billion since 2000.

"Ford intends to be even a stronger competitor in this region and in Thailand with new products over the next several years," Padilla told a news conference.

Ford, in alliance with Mazda Motor Corp., has ploughed nearly $1 billion into its Thai operation since 1998. The second biggest U.S. automaker and its Japanese partner have exported $2.7 billion worth of small one-ton trucks from Thailand since then.

The Ford-Mazda joint venture is in the process of expanding its annual Thai output capacity to 200,000 units by 2008 from 155,000 now, with the number of salaried employees rising to 4,500 from 4,200.

The venture, ranked third as Thai vehicle exporter after Toyota and Mitsubishi, exported 48,135 light-duty pickups during the first 10 months of 2005.

Padilla said he was confident Ford would be more successful in Asia than in North America, where its vehicle operations are struggling.

So far this year, Ford's North American unit has lost more than $1.4 billion before taxes. Ford's U.S. sales have fallen for all but two of the last 18 months.

RESTRUCTURING

Padilla declined to disclose details of Ford's major restructuring plan due to be unveiled in late January.

According to a report in the Detroit News last week, Ford plans to cut 25,000 to 30,000 jobs in North America within five years and close at least 10 plants.

Padilla said Ford's layoffs would be essential to make the company more competitive.

"The necessary and absolutely essential layoffs in North America do not have any implications for our operations in Asia and Pacific, or in Thailand where we are expanding our operations," he said.

Padilla expected Ford's Asian operation to be more cost competitive as it adopts new business practices.

"In many circumstances, we are changing the way we are doing business, and the processes that we used. The business models we have used in North America and Europe do not necessarily apply," Padilla said. "We will be seeking more different suppliers from more cost effective regions of the world, including Thailand, China and India."

Peter Daniel, head of Ford's Asia, Pacific, and Africa Operations, said the company would follow Japanese competitors by building its own regional network of parts suppliers.

"One different business model is in the way we go purchasing our parts. We used to have 10 different purchasing activities in 10 different markets. Now we go into a regional sourcing role where we can get synergy and deliver supplies across the region," Daniel told reporters.