Wednesday, October 10, 2007

Ford to Build Car Plant in Thailand

BANGKOK, Oct. 9 — As it proceeds with plans to cut jobs and close factories in North America, the Ford Motor Company is expanding aggressively in Asia, announcing a $500 million investment Tuesday to build a car plant in Thailand just two weeks after opening a $510 million manufacturing center in Nanjing, China.

Both investments were made with Mazda, the Japanese company that Ford controls through a 33.4 percent stake — a partnership that provides Ford with both cash and manufacturing skills.

“We’re looking for profitable growth,” said John Parker, Ford’s executive vice president for Asia and Africa. “You have to put some foundations in place.”

Ford’s strategy appears to be to save money by curtailing operations in North America while making money by expanding in growth markets in Asia and elsewhere abroad.

The company announced worldwide losses of $12.7 billion last year and said it planned to idle or close 16 North American facilities by 2012, including seven vehicle assembly plants.

Its operations outside the United States provide Ford with a lifeline of liquidity, including $551 million in pretax profit in South America in 2006, $469 million in Europe and $168 million through the association with Mazda.

The company lost $185 million in Asia last year, mainly because of a collapse of sales in Taiwan and shifting tastes in Australia away from larger cars, but rebounded in the second quarter of 2007 to $26 million in profit.

The plant in Thailand will produce 100,000 small cars, with 80 percent of them to be exported to other Southeast Asian countries as well as Australia, New Zealand and South Africa. Ford has no plans to export the small passenger car, known in the industry as a B-class, to the United States, Mr. Parker said.

Exporting to the United States could antagonize the United Automobile Workers, the union facing layoffs as part of Ford’s corporate overhaul under Alan R. Mulally, the chief executive appointed in September 2006 to help turn around the carmaker. U.A.W. talks with General Motors last month led to a short strike. Chrysler is being threatened with a walkout in current talks, and Ford will be next to negotiate.

Thailand will export about 625,000 vehicles this year, 70 percent of them pickup trucks, of a total output of 1.25 million vehicles.

American pickup truck makers are shielded to an extent from foreign competition by a 25 percent tariff imposed in the 1960s, known colloquially as the chicken tax because it was initially levied in retaliation for duties imposed on American chicken exports.

The investment by Ford and Mazda helps cement Thailand’s place as the third-largest Asian car manufacturer, behind Japan and South Korea. The expansion of Ford and Mazda into small cars helps Thailand diversify beyond pickups.

Last week, the Thai board of investment approved plans by Honda to double its annual production capacity here to 240,000 cars.

Japanese carmakers, led by Toyota, have gradually shifted some of their production to Thailand over the last decade. Nissan, Mitsubishi, and Isuzu and its partner General Motors, also have major plants in the country.

“It’s a big vote of confidence for Thailand,” said Frederic Neumann, chief Thailand economist for HSBC, referring to Ford’s and Mazda’s investment.

Vallop Tiasiri, president of the Thailand Automotive Institute, a government agency that plans strategy, says Thailand will have a manufacturing capacity of two million cars in the next five years.

Thailand suffers from political uncertainty. The generals who took power just over a year ago have scheduled elections in December, but questions remain about the future political role of the military and of Thaksin Shinawatra, the exiled prime minister who retains considerable popularity among some groups..

Sunday, October 7, 2007

Car bombs kill 23 in Iraq during Gates visit

By Kristin Roberts

BAGHDAD, Dec 5 (Reuters) - Car bombs killed 23 people in Baghdad and three other Iraqi cities on Wednesday but U.S. Defense Secretary Robert Gates said a secure, stable country was within reach.

A car bomb near a Shi'ite mosque in central Baghdad killed 15 people and wounded 35 as they gathered for evening prayers, making it the capital's deadliest bombing since September.

Gunfire could be heard and black smoke rose over the area after the blast in the mainly Shi'ite Karrada district, just across the Tigris River from where Gates met Iraqi officials in the heavily fortified "Green Zone" compound.

An al Qaeda-affiliated group warned this week of a renewed campaign of car bomb attacks.

Despite the day's bloodshed, overall attacks across Iraq have fallen to their lowest level in nearly two years, focusing attention on whether the Shi'ite-led government can reconcile with disaffected minority Sunni Arabs.

"More than ever, I believe that the goal of a secure, stable and democratic Iraq is within reach," Gates told a news conference less than an hour after the Baghdad blast.

"We need to be patient. We also need to be absolutely resolved in our desire to see the nascent signs of hope across Iraq expand and flourish so that all Iraqis can enjoy peace and prosperity."

On his unannounced visit Gates urged the government to integrate mainly Sunni Arab neighbourhood patrol units into its army and police. Washington says the 60,000-strong neighbourhood patrol forces have helped reduce violence.

"Iraqis who have chosen to fight al Qaeda need to be integrated into Iraq's security forces or provided other job opportunities," Gates said.

Earlier on Wednesday the government took a step in that direction by announcing it would put 45,000 of the patrol members on its payroll by the middle of 2008.

That means tens of thousands of armed Sunni Arabs, many believed to have fought against the government before this year, will soon be working for it.

The government had been regarded as being lukewarm to the neighbourhood patrols, fearful they could turn into an unaccountable militia made up of its recent foes.


Gates touched down first in Mosul, north of Baghdad, in a region U.S. commanders now consider one of the most violent parts of Iraq after al Qaeda militants relocated to the north and northeast following crackdowns in the capital and the west.

Hours before Gates arrived a car bomb near a police station killed a civilian in Mosul, Iraq's third largest city. Car bombs in Baquba and Kirkuk, two other cities north of Baghdad, killed at least seven others.

A group of U.S. combat brigade commanders, speaking to reporters at the Camp Victory military base in Baghdad, sought to play down the impact of the car bombing in the capital.

"The extremists are on the ropes. They are clearly on the ropes," said Colonel Jon Lehr, who is based in Diyala province.

"They are trying to consolidate their gains and make a statement to create a fracture between the population, the Iraqi security forces and the coalition forces."

The U.S. military announced the deaths of three of its soldiers in Salahuddin province, another of the northern areas that has suffered increased fighting. But Gates said commanders in the north had told him that their enemy was now appearing in smaller, less sophisticated units than a few months ago.

Colonel Raymond Thomas, an assistant commander of the U.S. division responsible for the north, said more troops were being sought for Diyala province, of which Baquba is the capital.

President George W. Bush sent an extra 30,000 U.S. soldiers to Iraq earlier this year to try to pull the country back from the brink of all-out sectarian civil war and to give Iraq's leaders "breathing space" to reach a political accommodation.

But Prime Minister Nuri al-Maliki's government has made little headway in passing laws aimed at reassuring Sunni Arabs they will share in Iraq's oil wealth and political power. (Additional reporting by Peter Graff, Dean Yates and Paul Tait; Writing by Peter Graff; Editing by Robert Woodward)