Restructuring Successes

We continue to work hard to restructure our business to achieve and maintain profitability by delivering products customers want and value and reducing our cost structure. Though this transition has been painful, it is beginning to pay off. In 2009 and early 2010 we achieved some important results from our restructuring plan. For example:

• We posted a pre-tax profit for full-year 2009 (excluding special items), reflecting our improving performance throughout the year with strong pre-tax profits in the third and fourth quarters.
• Based on our improving business performance, the gradually strengthening economy and our updated planning assumptions, we now expect to deliver solid profits with positive Automotive operating-related cash flow for full-year 2010, and continued improvement in 2011.
• We achieved market share increases in multiple global markets, including the United States, where we had not gained market share since 1995. Full-year retail market share in the United States was up approximately one percentage point over last year, at 15 percent. Market share in our European market was up approximately half a percentage point in 2009.
• During 2009, we reduced Automotive structural costs by $5.1 billion, exceeding our full-year goal by more than $1 billion (measured primarily at prior-year exchange, and excluding special items and discontinued operations).
• We continue to deliver new products more quickly. For example, in North America, 45 percent of our vehicle lineup by volume was new or significantly freshened for 2009. By 2014, we plan to replace or refresh between 140 percent and 160 percent of our lineup by volume in those regions, so that within five years, we will have fully refreshed our product portfolio globally.
• Important customer metrics – including favorable opinion, consideration, shopping and intention to buy – ended the year at record levels. Favorable opinion is up more than 20 percent from the beginning of the year, and intention to buy Ford increased more than 30 percent.
• We have been able to reinstate some salaried employee benefits that were suspended in an effort to help lower costs during our restructuring. This included a reinstatement of the Company's 401(k) matching program effective January 1, 2010. We also reinstated the Salaried Tuition Assistance Plan with revised program guidelines effective March 1, 2010. Also in 2010, merit increase payments were made to employees in the United States, and we were able to pay profit sharing to eligible Ford-UAW employees.
• We continued to streamline our dealer network to increase the viability of our dealers and improve our cost structure. As of March 31, 2010, we reduced the number of dealers by 20 percent since year-end 2005.
• We continued to streamline our supplier network through the Aligned Business Framework program, which strengthens our relationships with core suppliers, increases supplier viability and helps improve our cost structure and quality. We also continue to reduce the total number of production suppliers we use. This has declined from 3,300 suppliers in 2004 to 1,600 at the end of 2009. We have identified about 850 of these as long-term suppliers eligible for new major sourcing, which moves us toward our goal of 750 suppliers.