BOI urged to mediate FMC row with Mazda

Francisco Motor Corp. (FMC) is seeking the help of the Board of Investments (BOI) to mediate a dispute between FMC and Mazda Motors Corp. of Japan.

According to Roland C. Francisco, assistant vice president of FMC, the dispute allegedly started from Mazda’s failure and refused to honor an agreement it had with FMC with regard to the entry of Ford’s Ranger pick-ups and econovan.

Mazda is now 33 percent controlled by Ford Motor Corp.

FMC and Mazda had a previous 25-year assembly and distribution agreement.

Under that agreement, Mazda and Ford could bring in and sell any model except for the B25 pick-up and the econovan.

However, Mazda was able to reach a compromise agreement with FMC wherein Mazda would takeover the assembly of the B25 pick-up and econovan by the year 2002.

FMC went ahead and spent P250 million to construct a new plant for the assembly of the B25 pick-up and econovan.

Unfortunately, FMC said, Mazda failed to provide the necessary semi-knocked down (SKD) packs and Ford came in and started selling its Ranger pick-up series.

Ford argued that the Ranger pick-up is different from the B25 pick-up.

FMC is seeking a settlement from Mazda amounting to $66 million.

Mazda, on the other hand is only willing to pay a settlement of $4 million. According to Francisco, the BOI and government should help FMC out as a Filipino entrepreneur.

He complained that allowing Mazda to get its way would be "sending the wrong message that the government supports foreign entrepreneurs over locals." – Marianne Go