Global Integration

The global integration of our product development, manufacturing, purchasing and marketing efforts is key to delivering high-quality, innovative and desirable products quickly and cost effectively. In 2007 and 2008, we named global heads of product development, manufacturing and marketing to drive the alignment of these key functions globally. For example, effective January, 1, 2008, Joe Hinrichs was named group vice president for Global Manufacturing. Formerly, Mr. Hinrichs was vice president of North American manufacturing. In his new role, Mr. Hinrichs will drive alignment between manufacturing and product development on a global scale, leveraging the Company's worldwide product strategy. In 2007, we also increased the global integration of our regional research and product development organizations. Moreover, starting April 1, 2008, Ford reorganized senior leaders in the product development and purchasing organizations to assign global responsibility for key vehicle segments and major purchasing functions.

We already successfully share vehicle platforms globally. For example, the new Ford Edge and Lincoln MKX crossover share a common global platform with the Mazda CX-9, and the Fusion, Milan and MKZ sedans share a platform with the Mazda6. We also recently announced the launch of a new global "B-car" platform, based on the Verve concept vehicle. This small car, to be called the Fiesta worldwide, will be available in Europe in 2008, Asia in 2009 and then in North America in 2010. (See our Fiesta case study.) We are also planning to bring the award-winning Transit Connect mid-sized commercial van to the United States in 2009. The Transit Connect, which has been a top seller in Europe, provides a unique combination of large cargo space, truck-like workhorse quality and durability, and car-like fuel efficiency. Sharing platforms across car lines and regions reduces engineering and materials costs, helps us develop new products faster and improves quality. It also allows our designers and developers to concentrate on creating vehicles with distinct personalities, realizing the potential for scale and flexibility while maintaining differentiation. We will build on this kind of global integration by integrating more of our research and new product development activities, as well as expanding car line sharing.

In addition, we are continuing to standardize materials and parts across vehicle lines. This standardization will not only reduce costs, it will increase quality by reducing the number of different parts we test and manufacture. In 2006, we developed cross-functional Commodity Business Plan teams, including representatives from product engineering, purchasing and cost optimization, to choose the most effective standardization opportunities. These groups have already had great success in parts standardization and cost reductions, including developing a common global strategy for Ford's door hardware modules, which will be launched across the Company's global B- and C-car platforms; reducing the number of different power steering systems on light trucks from six to two; and reducing the number of body electronic module families from 20 to seven on Ford North America vehicles.