Ford & DaimlerChrysler Increase Ballard Fuel Cell Investment

Ford Motor Co. & DaimlerChrysler announced their plans to invest $44.6 million in fuel-cell maker Ballard Power Systems Inc. The move is part of Ford and DaimlerChrysler's restructuring efforts. Their alliance is expected to speed development of the alternative-energy devices.

Ford will be purchasing 2.03 million shares at $12.34 (Canadian) a share, for a total of $25 million (Canadian), and DaimlerChrysler will buy 2.43 million shares at the same price for $30 million (Canadian), Ballard said in a statement. Ballard, of Burnaby, British Columbia, is the largest maker of fuel cells for cars and trucks.

Ballard reached an agreement July 8 with the automakers for the share purchase. It is reported that if Ballard hadn't opted to exercise the investment by Dec. 31 2004, the price would have been reset to market price. Since then Ballard shares have risen 53 cents, or 6.8 percent, to $8.35 (Canadian) on the Toronto stock exchange. Ballard said it expected to close the share sale early next month.

Ford, DaimlerChrysler and other automakers are currently under regulatory pressure to reduce pollution, and are developing fuel cells as a potential replacement for gas-powered internal-combustion engines. Fuel cells produce electricity in a chemical reaction that combines hydrogen and oxygen, with water vapor as the by-product.

As part of the July agreement, Ford and DaimlerChrysler agreed to increase their respective investments in Ballard. In addition to the share purchase, DaimlerChrysler and Ford committed $58 million to Ballard for the development of a new line of fuel cells and electronic drives. Ford and Daimler Chrysler automakers have already developed experimental concept cars that use Ballard fuel cells to power them.