During 2006, Ford developed and implemented elements of our Accelerated Way Forward plan to return North America to profitability in 2009. Actions included:
- Idling of the St. Louis Assembly Plant in March and the Atlanta Assembly Plant in October, consistent with the North America restructuring plan.
- By agreement with the UAW, extending early retirement or separation packages to all UAW-represented hourly employees, including Ford employees at our Automotive Component Holdings, LLC (ACH – formerly Visteon) plants. Through year-end 2006, about 37,000 hourly employees represented by the UAW had accepted (and not rescinded) an early retirement or separation offer. The vast majority of these employees are expected to separate from the Company by September 2007, though many of the offers include an opportunity for the employee to rescind acceptance until the time of separation. The accelerated plan to sell or close the majority of our ACH facilities by the end of 2008 will result in additional personnel reductions. In addition, the Company realized cost savings from the implementation of its health care agreement with the UAW.
- Efforts to reduce North America salaried-related costs by about one-third, which will reduce the salaried work force by the equivalent of about 14,000 positions. In addition, we implemented cost-saving revisions to salaried benefit plans.
- We continue to work to sell or close the majority of our ACH facilities by the end of 2008, though we now expect that portions of one or two facilities may remain open beyond 2008 to provide for an orderly re-sourcing of business to the supply base.
- Plans to sell Automobile Protection Corporation (APCO), a subsidiary that offers vehicle service contracts to dealers of all makes and models, and all or part of Aston Martin. The APCO sale was completed in April 2007; the Aston Martin sale was completed in May 2007.
- Launching new products that are receiving positive feedback, including the Ford Edge, Lincoln MKX, Ford Expedition and Lincoln Navigator, all in North America; the Ford S-MAX, Ford Galaxy and Ford Transit in Europe; and the Jaguar XK, Land Rover LR2, Volvo S80 and C30, and Mazda CX9.
- A corporate realignment in December 2006 that streamlined the organization and formed a Global Product Development team, to better integrate and leverage global resources across the automotive business units.
- Obtaining $23.5 billion of new liquidity in December, including a convertible debt offering of $4.95 billion, a secured term loan of $7 billion and a secured revolving credit facility of $11.5 billion. This resulted in total automotive liquidity of about $46 billion at year-end 2006.
