Sustainability Report 2006/7 - Glossary & Key Terms

ACEA	European Automobile Manufacturers Association (Association des Constructeurs Européens d'Automobiles)
Annual Report on Form 10-K	An audited annual financial report required by the U.S. Securities and Exchange Commission containing more detailed information about the company's business, finances, and management than the annual report.
Bin	A set of emissions standards under the new U.S. Tier 2 emissions program. The lower the bin number, the lower the vehicle's tailpipe emissions.
CAFE (Corporate Average Fuel Economy)	A U.S. regulation requiring auto companies to meet certain sales-weighted average fuel economy levels for passenger cars and light trucks and report these numbers annually.
Ceres	Ceres is a network of investors, environmentalists and other public interest groups that works with companies and investors to address sustainability challenges (see www.ceres.org for more information).
DOE	U.S. Department of Energy
E85	Refers to a fuel blend of 85 percent ethanol and 15 percent gasoline.
EPA	U.S. Environmental Protection Agency
EU	European Union
FFV (Flexible Fuel Vehicle)	A vehicle that can be run on any blend of unleaded gasoline with up to 85 percent ethanol.
Flexible Manufacturing	Using common platforms and shared manufacturing technologies that allow a single plant to make multiple models and switch relatively rapidly between them, allowing faster response to changing customer demand.
FPS (Ford Production System)	A structured process Ford uses to organize and manage production at all Ford manufacturing plants globally.
Fuel Cell	A type of power plant that generates electricity by combining oxygen and hydrogen to form electricity.
Fuel Economy	The distance that can be traveled on a single gallon of fuel.
Fuel Efficiency	Fuel efficiency measures the amount of fuel (in ton-miles-per-gallon) needed to move a vehicle of a certain weight a certain distance.
GRI	Global Reporting Initiative, a multi-stakeholder process and independent institution whose mission is to develop and disseminate globally applicable Sustainability Reporting Guidelines.
ICE (Internal-Combustion Engine)	An engine powered by fuel ignited (by either spark or compression) inside a cylinder.
IIHS	Insurance Institute for Highway Safety
ISO 14001	Global environmental management system standard
LEV (Low Emission Vehicle)	A level of standards for tailpipe emissions (hydrocarbon, carbon monoxide and oxides of nitrogen) enforced in California and states that have adopted California standards. An LEV II vehicle meets the same tailpipe standards as a federal Tier 2 bin 5 vehicle.
LEV Program	The unique vehicle emissions program adopted by California for the control of tailpipe and evaporative emissions that provides several sets of emissions standards (LEV, ULEV, etc.). The LEV II Program starts with the 2004 model year and offers approximately the same air quality benefit as the new federal Tier 2 program.
Materiality	Materiality as used in this Sustainability Report does not share the meaning assigned to this concept for purposes of financial reporting. For the purposes of this Sustainability Report, we consider material information to be that which is of greatest interest to, and which has the potential to affect the perception of, those stakeholders who wish to make informed decisions and judgments about the Company's commitment to environmental, social and economic progress.
MY (model year)	The manufacturer's annual production period which includes Jan. 1 of the calendar year. For example, production of 2004 model year vehicles might begin in June 2003 and end in May 2004, but could start as early as Jan. 2, 2003, and end as late as December 2004. We report fuel economy by model year because that is how it is reported to government agencies, and therefore, this data corresponds to what is available in the public domain.
NCAP	New Car Assessment Program, the U.S. Government "crash testing" program
NGO	Nongovernmental organization
NPRI	National Pollutant Release Inventory (Canada), similar to U.S. TRI
Pulse Survey	An annual, voluntary survey of Ford salaried-employee satisfaction.
PZEV (Partial Zero Emission Vehicle)	A vehicle standard that is part of the LEV II Program. A vehicle that meets SULEV tailpipe emissions and has zero fuel evaporative emissions.
QS 9000	Global quality management standard
RFQ	Request for quote
Six-Speed Transmission	A transmission using six gears for improved fuel economy compared to typical four-speed transmissions
STA	Supplier technical assurance
Stakeholder	Anyone who is impacted or believes they are impacted by the operations or practices of the Company is a stakeholder, including customers, employees, business partners, shareholders, governments, communities and non-governmental organizations. Some also consider the environment a stakeholder.
SUV	Sport utility vehicle
SULEV (Super Ultra-Low Emission Vehicle)	A level of standards for tailpipe emissions (hydrocarbon, carbon monoxide and oxides of nitrogen) enforced in California and states that have adopted California standards. A SULEV II vehicle meets the same smog-forming tailpipe emissions standards as a federal Tier 2 bin 2 vehicle.
Tier 1 Suppliers	Suppliers sourcing directly to our assembly plants
Tier 2 Suppliers	Suppliers not sourcing directly to our assembly plants
Tier 2 Emissions Standards	The new U.S. federal program, starting with the 2004 model year, to control vehicle sets of vehicle emissions standards, called bins, ranging from 1 (lowest emissions) to 10 (highest emissions). At the conclusion of the phase-in period, auto manufacturers' U.S. fleets must meet an average bin 5 level of emissions.
TRI (Toxics Release Inventory)	An inventory of releases and transfers of certain chemicals that are required to be reported to the U.S. Government.
Variable Cam Timing	Improves fuel economy by allowing valves to be operated at different points in the combustion cycle, and provides performance that is precisely tailored to the engine's specific speed and load at that moment.
Vehicle Dependability Index	A J.D. Power and Associates index that evaluates vehicle quality after three years of ownership.
VOCs (Volatile Organic Compounds)	Compounds that vaporize (become a gas) at relatively low temperature. They are a concern for indoor and outdoor air quality and contribute to smog formation. VOCs are emitted from manufacturing facilities (including painting operations) and from vehicles (as hydrocarbon tailpipe emissions and from evaporation of fuel and other fluids).
WBCSD	World Business Council for Sustainable Development
Well-to-Wheels CO2 Emissions	Accounts for emissions from the vehicle itself, as well as CO2 emissions resulting from the production and distribution of the fuel.
WRI	World Resources Institute
ZEV (Zero Emission Vehicle)	The lowest level of standards for vehicle emissions (zero emissions) enforced in California and states that have adopted California standards. A federal Tier 2 bin 1 vehicle is also a "zero emission vehicle."

These are Ford's working definitions of some key concepts in this report. They have proven useful in the development of our thinking on sustainability, because we are accustomed to managing for wise use of capital. We don't presume that they are universally applicable – rather to state what they mean to us in the context of our business. Indeed, we welcome feedback and comment from our readers on these concepts.

Sustainability

At Ford, we have defined sustainability as a business model that seeks to create value for stakeholders by preserving or enhancing environmental, social and economic capital.

Environmental capital

By environmental capital we mean both the natural resources and ecosystem goods and services that are used or impacted in the production and use of the goods and services that businesses provide.

Some forms of environmental capital are finite. There is a given quantity of crude oil in the Earth's reservoirs. The same goes for copper, natural gas, bauxite, iron ore and other resources that manufacturing enterprises like ours use directly in the production of goods. Other natural assets, like wind power, can be renewed indefinitely.

Ecosystems also provide "goods," like clean water, fresh air, biodiversity and unspoiled land, and "services," like the ability of wetlands to cleanse water and the atmosphere to protect us from harmful radiation. In the absence of proper stewardship, these otherwise renewable resources can be consumed or degraded in the production or use of the industrial world's products and services.

Social capital

Social capital refers to the capacity of people in our communities to participate fully in both the production and consumption of our products and services. Social capital includes the capabilities of our workforce – a product of education, training, working conditions, human rights standards and community infrastructure. It includes our connectedness to society and the value we create through engaging with stakeholders.

A major current focus of our social initiatives is the implementation of our Code of Basic Working Conditions in all of the markets and facilities where we operate, as well as throughout our supply chain.

We seek to enhance social capital by, for example, responding to community needs through philanthropic and other financial support and by participating in civic life directly and encouraging our employees to participate.

Economic capital

Economic capital includes the money Ford has available to invest, tangible assets created by our capital investments in property and facilities, and intangible assets like our brand value. It also includes the value we add to the public and private sectors through investments in partnerships, tax payments and other contributions.