Board meeting at AAT attended by Mr. Booker, Vice-Chairman of Ford (second from right) and Mr. Furuse, Senior Managing Director of Mazda (third from right). They approved May 29 as the date for the start of operations. (Rayong, Thailand)

At 13 degrees north latitude, the glaring summer sun beats down. It is 12:30 p.m. on April 24. Eight directors, including Mr. Wayne Booker, 63, Vice-Chairman of Ford, Yoichiro Furuse, 56, Senior Managing Director of Mazda; and Toshihide Saeki, President of AAT, are present for the board meeting held once every three months for directors from the United States, Japan and Thailand. With a prompt "Now, let us begin," Mr. Booker, who, in addition to being Vice-Chairman of Ford, is also Chairman of AAT, takes the lead in discussions on the preparations for the start-up of operations.

With four members each, the Japanese and Americans have equal representation on the board. They are joined by 12 executives dispatched to attend from Japan, the United States, Europe and Australia. "Does the quality exactly match design?" "Are the cost calculations correct?" "Has the delivery target been met?" With the whole conversation in English, the members check figures set in previous board meetings one by one.

AAT is situated in the Eastern Seaboard Industrial Estate (Rayong Prefecture), an industrial park developed from pineapple fields, located approximately 130km southeast of Bangkok. The plant, which sits in a compound of 850,000 square meters, has an annual production capacity of 135,000 units for one-ton-class small trucks. General Motors is now building its plant directly adjacent to AAT.

Involvement in the AAT project, which has drawn a combined investment of \47 billion, came unexpectedly to Mazda, which was in financial difficulties due to the collapse of the 'bubble' economy in Japan. "Will you consider a joint manufacturing venture in Thailand?" A Ford executive proposed to Mazda board members in March 1994. At that time, Mazda was already being strongly influenced by Ford.

Following the long-term strategic relationship agreement in December 1993, three advisors from Ford, including Mr. Henry Wallace, 52, the former President and Mr. Gary Hexter, 53, Senior Managing Director, took up their positions in February 1994. "The first task they took upon themselves was the project in Thailand. Up until then Mazda hadn't given serious attention to such a project," revealed one Mazda executive who has been involved in the project since the feasibility study stage. Although Ford is the second largest automaker in the world, its share in Thailand is a mere 4.4% (as of the first quarter in 1998). This is less than half of Mazda's share (9.1%). Mazda had already built an assembly plant in Thailand in the 1960s, but it had to withdraw because of competition faced by Japanese manufacturers. Now, under the 'Ford 2000 Plan', which aims to secure Ford's top place among the world's carmakers before the turn of the century, the company announced that it would place emphasis on Asia. AAT was its first attempt to fulfill this strategy.

The offer of joint production came just at the right time for Mazda, too. Mazda was thinking about making inroads into the Asian continent, but lacked the strength to build a plant on its own. "This will enable us to export not only to Asian countries, but also to Europe." The final decision to accept the offer from Ford was made at a Executive Committee Meeting (ECM) in July 1995. "It was a make or break decision for the company, but since we could not open a plant by ourselves, we had no other choice," recalls a former executive who regularly attended the ECM at that time.

Mr. Furuse, Senior Managing Director, who took part in the board meeting, said, "The two companies are equal investment partners in the operation. Neither has any advantage over the other." But at the same time, he added, "This will serve as a touchstone for the future relationship between of Mazda and Ford." He firmly believes it will be of crucial importance in determining their survival, as global competition in the auto industry intensifies even further.