FORD TO ASSUME MANAGEMENT OF TROUBLED MAZDA.

Byline: Mari Yamaguchi Associated Press 

Ford Motor Co. will assume virtual control of ailing Mazda Motor Corp., which has been battered by Japan's recession and the strong yen.

Mazda and Ford put out a joint statement today confirming reports that Ford would increase its share in Mazda to 33.4 percent of the company's shares, and that Mazda would voluntarily cede management control.

Trading in Mazda shares was suspended this morning in Tokyo following the news reports of the impending changes.

The increased share alone does not give Ford control, but analysts said that coupled with the top-level management changes, it would effectively put the U.S. company in the driver's seat.

``Ford and Mazda believe that closer coordination of our cooperative strategies and plans, particularly in the areas of product development, manufacturing and distribution of vehicles, will enable both companies to improve competitiveness and to achieve improved economies of scale and efficiencies,'' said Wayne Booker, executive vice president of Ford.

Even before the formal announcement, the news was being welcomed. Japan's trade minister, Shunpei Tsukahara, said Ford's plan to raise its share in Mazda was ``good for the world economy'' in an era of economic liberalization.

Tsukahara said the Ford-Mazda moves cannot be directly linked to the U.S.-Japan auto agreement of last year, which was aimed at further opening the Japanese market for foreign auto makers.

However, the development comes only days before President Clinton is to visit Japan, and the same day on which the White House is to release a report touting American progress in the Japanese auto market.

In recent years, Ford has been pouring cash and management expertise into Mazda, which has seen its sales sag significantly since the decade began. Ford bought about 25 percent of Mazda in 1979, and had maintained its stake since then.

Following a board meeting, Mazda announced that its president, Yoshihiro Wada, will take the largely ceremonial post of chairman. He will cede direct control of the company to former Ford Venezuela president Henry Wallace, who became executive vice president of the Japanese company in 1994.

Wada is a banker who was sent in from Sumitomo Bank, the second largest shareholder in Mazda after Ford.

The company said in a statement that the agreement would ``strengthen their existing strategic relationship on a global basis.'' It said Mazda would maintain a ``distinct identity'' and would continue to offer its own products through its own distribution channels.

In recent years, Mazda's high domestic production ratio and dependence on exports have made it vulnerable to the strong yen, which makes Japanese products more expensive overseas.

Mazda's performance in the U.S. market has been dismal. Its U.S. sales in 1995 fell 24 percent from the previous year. So far in 1996, its sales have been down 18 percent from a year ago.

In addition, the automaker lost $380 million in the fiscal year that ended in March 1995. It was in the midst of a restructuring program to trim its payrolls to 26,000 workers by March of this year, for a total reduction of 4,000 jobs over three years.