Capacity Alignment

We have reduced and realigned our vehicle assembly capacity to bring it more in line with demand and shifting customer preferences. For example, we are converting plants to produce smaller, more fuel-efficient vehicles. Specifically, we are converting three assembly plants from the production of large SUVs and trucks to the production of small cars, to support what we believe is a permanent shift in consumer preferences to smaller, more fuel-efficient vehicles. To this end, approximately 50 percent of our future U.S. manufacturing capacity will be allocated to small and medium-sized vehicles.

We are also closing plants to reduce capacity. Since 2005 we have closed 12 manufacturing facilities in North America (including Automotive Components Holdings (ACH) facilities). We have announced that four additional plant closures will take effect between 2009 and 2011 – two of these planned closures involve ACH facilities. We are exploring our options for the four remaining ACH plants and intend to transition these businesses to the supply base as soon as practicable.