Joint Venture Proposal for AutoThai Corporation


Ford Corporation

Ford, the oldest automobile manufacturer, has a strong interest to create a better and more challenging relationship with your company in forms of joint ventures.

History means quality and reputation, but Ford has never been satisfied with itself.

In 1994, Ford 2000 is an initiative begins with the consolidation of Ford's North American and European operations, and continues with a commitment to bring the entire Ford global organization into a single operation by the year 2000.

Ford 2000 created a single, global management team. This has allowed the company to eliminate duplication, initiate best practices, use common components and designs for the advantage of scale, and allocate resources to wherever they are needed to best serve market needs. Ford 2000 combines the power, resources, and reach of a world company with the immediacy, the intimacy, the agility, and the spirit of a small one. This was accomplished with the creation of five vehicle centers.

Ford 2000's strength is that it fully utilizes the company's depth of human diversity. Ford believes that diversity will be the engine that drives the creative energy of the corporation of the 21st century. Successful companies will be those who are able to draw on this diversity, to stay on the innovative and competitive edge of their fields.

And we like to have AutoThai join our Ford 2000 to become another successful story in the Ford's and industrial history.

A joint venture with us at the same time means upgrading your manufacturing skill and design skill instantly. We will offer assistant from almost every department of our Ford compnay including, informaton research, marketing and financing. It will be the end to your wondering of how to enter the world market.

We truly believe that Ford will be a long time partner and friend to your company to enter the 21st century. We like you to join with us to explode the world of opportunies.


Our Proposed Car - Windstar Minivan

Plant Production Capacity:

Initially, 60,000 car production capability per year and 25% of which produced for export. With Ford's srong global network and quick expansion in the Pacific Asia, export will start immediately after the production starts. And also there is a huge demand of ford auto parts in Asia Pacific region, so there are also a big opportunity for this joint venture to produce parts for the domestic market and export market.

The reason we higher the initial production capacity is because we believe that a new model from Ford plus the local network AutoThai has will attract a broad range of customers. We also believe that the expansion capacity should be higher than 150,000 cars, because the improving economy and growing reputation will increase the auto demand so quickly in the next five years.

Ownership:

We expect this joint venture agreement to be 8 to 10 years long. And during the agreement, AutoThai Corporation can not form any other join ventures with other company that use Ford's technology.

Management

We propose a 15 member Board of Directors.

7 Ford
7 AutoThai
1 Foreign Investment Commission of AutoThai

Because there are technology transfer involved and new development will also be invoved in the new joint venture, we believe that 7 directors from our Ford Corporation will be suitable for the operation the first two years. After that, the number of directors can be lowered to 5 for further expansion and operation.

Financing

Contributions toward total capitalization:

1. 50% Equity

-50% to be provided by Ford
-50% to be provided by AutoThai
2. 20% to be borrowed in the form of bonds by our joint venture.
3. 30% to be acquired from the chinese stock market. We believe that stock market in US is supportive for us to have an IPO. And the stocks can also lower our risk of failure of paying back the bonds.

Locations

Thailand capital Bangkok is the most suitable place for plant location. It's a trade port, industrial center and largest city in Thailand. Though it is not a free-trade zone, some free warehouse facilities are available within port terminal complex.

The tremendious amount of human resource, capital and political convenience in Bangkok can really help the new joint venture to start the operation, expansion and marketing.

The site will be more suitable to be in some economic developing zone in the surburban area near Bangkok where real estate price is not as high as the central area of Bangkok.

Technology Transfer and Training

1. Immediate needs:

-Rapid training of AutoThai Corporation technicians and management

Right after the agreement signed, we will start to train a group of Autothai's technicians and managers. We then will build a research center in Bangkok to help develpment and training. A training program will be implemented to help employee retraining. The training will be both in Ford's facility in US headquater or in Thailand.

2. Future needs:

-Rapid and meaningful technology transfer

Certain amount of technology transfer will be alowed.

-After the first five years, 70% of components to be supplied within Thailand.

It is hard to make sure that all the parts to be supplied within Thailand, because we are trying to improve our design every year. For the new model we design specifically for Thailand, we would like to try our best to manufacture those parts in the facility owned by the joint venture.

Regards,

Ford Corporation


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