Mazda Stops Production in U.S., Leaving AutoAlliance International in Hands of Ford

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Since 1992, Mazda Motor Corporation (Hiroshima, Japan) and Ford Motor Company (NYSE: F) (Dearborn, Michigan) have shared production space at the AutoAlliance International vehicle assembly plant in Flat Rock, Michigan. That long relationship ended on August 24, 2012, when Mazda rolled its final Mazda6 vehicle off the assembly line in Michigan. While Mazda will retain its 50% stake in the assembly plant, Ford has taken over total production and Mazda no longer produces vehicles in the U.S.

The 2.7 million-square-foot plant will continue to produce Ford Mustang automobiles, and it has been announced as the future home of the Ford Fusion in the 2014 model year. But, in a surprising move, Mazda has removed its production back to Japan. Japanese automakers are now focusing much of their assembly efforts in the U.S., as it is more cost-efficient to manufacture vehicles locally for sale in the country than to produce them overseas and then ship them over, but Mazda is going to focus its vehicle production efforts back home.

Despite the removal of Mazda from the premises, Ford has big plans for the assembly plant. There is a $550 million retool and expansion under way in Flat Rock that will add another 300,000-square-foot body shop to the facility, as well as upgrade the paint shop and install new tooling equipment in order to ready the plant for the Fusion. This project will create 1,200 new jobs, which will bring total employment at the plant to 2,900 when construction is completed in the summer of 2013, just in time to begin production of the 2014 model year vehicles.

Only time will tell if Mazda's retreat to Japan was a smart move for the small automaker, but Mazda has a history of going against the grain. In the past, Mazda continued to produce vehicles with the fuel-inefficient rotary engine long after its competitors had stopped. Also, Mazda never built its own assembly plant in the U.S., as all of its competitors did; rather, it relied on the single facility in Flat Rock.

While the current generation of the Mazda6 saw sales slowing dramatically, the automaker is already showing off the next generation of the vehicle, which will now be produced in Japan. The new Mazda6 will be a 2.0- or 2.5-liter, four-cylinder sedan that will give up some miles per gallon for a larger size body, and it is poised to make its debut at the Moscow Auto Show. The engine will be the same base engine Mazda uses in its smaller Mazda3 and Mazda CX-5 vehicles.

Mazda is making a bold move, giving up totally on production in the U.S. and we will have to see if it pays off in the long run. Ford is overjoyed to get its hands on the complete facility in Flat Rock, and is certain to take advantage of having the retooled production space to use once the project is completed. For the time being Mazda has abandoned the U.S. but it may only be a matter of time before Mazda has to rethink that proposition as the lopsided exchange rates may force the automaker to begin production once again in the U.S. at some point in the future.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.