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Japan Carmaker, Ford Join Forces

May 8, 2001

TOKYO (AP) _ In a key reshuffling of global auto alliances, a manufacturer affiliated with Toyota Motor Corp. said Tuesday it will develop hybrid gas and electric power systems for Ford Motor Co.

The preliminary agreement between Ford and Aisin AW Co. marks a change in strategy for Toyota, whose U.S. ally up to now has been General Motors Corp.

It also underlines the growing need among the world’s top automakers to develop new partnerships to keep up with cost-cutting pressures and technological advances.

Toyota has taken a lead in hybrid technology, which offers cleaner driving and better mileage than gasoline engines, by marketing the Prius in 1997. Since then, Honda Motor Co., another Japanese carmaker, has also come out with its own hybrid called Insight.

Aisin AW, which makes automatic transmission and car navigation equipment, will develop a hybrid similar to Prius’ for Ford by 2003 for the Escape sport utility vehicle, company spokesman Hirotake Kondo said.

``The agreement is between Aisin AW and Ford,″ Kondo said. ``But we cannot make this decision without approval from Toyota.″

Ford will offer funding to develop the hybrid, although the amount is not yet decided and other details of the agreement are still being worked out, he said.

Ikuno Fujii, Ford spokeswoman in Tokyo, said Ford has been in talks with various companies but was not prepared to make any announcements. Toyota spokesman Nobuya Eto declined comment, saying the matter was between Aisin AW and Ford.

Toyota officials have acknowledged that chairman Hiroshi Okuda has been in talks with Ford chief executive Jacques Nasser. Okuda and Nasser are longtime friends, and the new ties being forged between the two automakers are believed to be part of that personal relationship.

Aisin AW, based in Aichi Prefecture (state), central Japan, is about 40 percent owned by Toyota. It employs 6,500 people with annual sales of 410 billion yen ($3 billion) and supplies Toyota and other automakers. It has never had any business with Ford.

Ford became interested in Aisin AW after Volvo came under the Ford umbrella in 1999, Kondo said. Aisin AW sells automatic transmissions to Volvo.

Hybrid systems are cleaner than gas engines because they switch back and forth automatically between a gas engine and an electric motor. The key advantages of the hybrid are that the battery gets recharged while driving the car and that the car runs on regular gas.

Although there are cleaner auto technologies than the hybrid, such as the electric and fuel-cell cars, those technologies are not expected to take off commercially for several years. The hybrid offers a realistic compromise until then.

Toyota has a widespread agreement with GM for technological exchange, including developing hybrids.

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