Driving down to Rio

For months, Ford Motor Co. has been re-examining its operations abroad with an eye toward a bigger share of the world market. Recently it established Ford of Europe, Inc. to provide better overall control of its British and Continental subsidiaries. Last week Ford was market building again outside the U.S., this time looking south to Latin America. The company announced it is buying a majority interest in Willys-Overland do Brasil, Brazil's second largest automaker.

The German auto industry (see following story) is first in Brazil, with Volkswagen. A dozen other U.S. and European carmakers are also on the scene. Ford has assembled trucks in Brazil since 1919, completely built them there since 1957, but until recently has stayed out of the passenger-car field. Five months ago, Ford began building Galaxies in Brazil; by May they were selling almost as well as Willys-Over-land's boxy Aero-Willys and Itamaratys. Impressed by the possibilities, Ford bid to buy out its nearest competitor and acquire not only better production plants but also a more extensive sales and service network.

Ford's thoughts coincided with those of California Industrialist Edgar F. Kaiser, who also sensed a rising demand among Brazilians for more and better cars. Kaiser, with a 38% interest in Willys, has been building autos in Brazil since 1953, but has gradually realized that despite a lucrative business--Willys built 62,809 cars in Brazil last year --he has neither the technology nor the capital to keep up with a changing market. As part of a $40 million deal, he agreed to sell out to Ford.

Along with the Kaiser interest, Ford is buying a 14% share in Willys-Overland do Brasil held by Renault of France, whose Gordinis roll off the same assembly lines. The remaining shares are held by 45,000 Brazilian investors who now, to their delight, become partners of Henry Ford. Renault, which is Kaiser's partner in an Argentine car company called Industrias Kaiser Argentina, will acquire a controlling share of that firm. Renault will buy up a major part of Kaiser's 30% interest, as well as 14% held by two Argentine banks. Ford will also acquire Transax, S.A., an 1KA subsidiary in Argentina that has been supplying parts for Willys-Overland.

The arrangement seems to satisfy everybody. Kaiser, which plans to continue building its Jeeps in 32 countries, will gain additional funds for that and its other worldwide construction and manufacturing operations. Renault will concentrate on Argentina, where Italy's Fiat has been pushing hard to replace

Industrias Kaiser Argentina as the nation's biggest automaker. Ford will have a broader base from which to operate in Latin America. Brazilians may not realize immediately that they have a Ford in their future. Ford will continue to make Aero-Willys, Itamaratys and Gordinis for the time being; it will likely replace them later with Galaxies and a brand-new, still secret, five-passenger car known only as "M."

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