Thursday, July 14, 2005

Ford, Hertz agree to extend deal

Associated Press

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DETROIT -- Hertz Corp. has agreed to continue buying and promoting Ford Motor Co. vehicles through 2010, even if Ford sells off the Hertz rental car unit as planned, according to a new agreement between the companies.

Under the deal, Ford promises to pay half of Hertz's advertising costs each year from 2005 through 2010. In exchange, Hertz has agreed to buy a certain number of Ford, Lincoln and Mercury brand vehicles, according to documents filed this week with the U.S. Securities and Exchange Commission.

The filing didn't say how many vehicles are involved in the deal. In a previous filing, Hertz said approximately 41 percent of the vehicles it acquired domestically in 2004 were made by Ford and its subsidiaries.

Dearborn-based Ford and Park Ridge, N.J.-based Hertz signed a similar agreement in 2004 that was set to expire Aug. 31, 2007. The new agreement expires Aug. 31, 2010.

Ford, which has been trying to raise money and get out of non-core businesses, has begun the process of selling Hertz, which has been a wholly owned subsidiary since 2001. Hertz filed for an initial public offering of its stock last month. Ford said it plans to divest its remaining interest in Hertz after the offering.

Ford shares fell 9 cents to close at $10.69 Wednesday on the New York Stock Exchange.

On the Net:

Ford Motor Co.: http://www.ford.com