Struggling to sell new cars in North America and with cash reserves dwindling, Ford Motor Company is set to offload a 20 percent stake in Mazda, according to the Japanese manufacturer.

Ford isn’t looking to bail out of Mazda completely. Selling 20 percent of Mazda will still leave the cash-strapped Ford holding a 13.4 percent stake in the Japanese manufacturer.

However, Ford is in a race against falling stock values. The recent credit crisis and ravaged stock markets has seen the values of stocks around the world plummet. The 20 percent share in Mazda that Ford is selling was valued at $850m a month ago. Based on Mazda’s share price on Tuesday of this week, that share is now valued at a mere (in comparison) $543m.

Interestingly, the prospect that Ford will be reducing its share in Mazda saw the Japanese manufacturers share price jump 6.4 percent on Tuesday.

In an ironic twist, Ford first bought a stake in Mazda in 1979 and then raised that to a controlling share in 1996, saving Mazda from potential bankruptcy. Having turned Mazda around, it now seeks to shore up its own sagging bottom-line by selling out.

With US car firms Chrysler, Ford and GM in the process of hitting the US taxpayer up for USD$25 billion in emergency funding (on top of the USD$25 billion already pledged by the Bush administration), will the $500m generated by the sale of its Mazda shares even be noticed, or simply absorbed into the black hole of Ford’s financial woes?

The latest reports indicate that Ford’s shares in Mazda may be bought by trading houses Sumitomo and Itochu, Japanese insurance companies, car parts maker Denso and by Mazda itself.

Thanks for the tip Adam!