Personnel Reductions

Since 2005, we have reduced employment levels in our Ford North America business unit by about 60,500. As of December 31, 2008, our Ford North America business unit had approximately 75,200 salaried and hourly employees, including employees at Automotive Components Holdings facilities, compared with approximately 135,700 salaried and hourly employees on December 31, 2005. (These employee numbers do not include dealer personnel.) The majority of our hourly worker reductions were the result of early retirement offers and voluntary separation packages to U.S. employees, including Ford employees at our ACH plants. During the third quarter of 2008, we reduced our salary-related costs by about 15 percent, which included the involuntary layoff of some salaried employees. We reduced our salary-related costs by an additional 10 percent during the first quarter of 2009, which resulted in further salaried employee separations.

Together with the UAW, we offered buyout opportunities to our hourly U.S. workforce in 2008 as follows.

• We extended an enterprise-wide buyout offer to all Ford hourly employees represented by the UAW at Ford and ACH locations during the first quarter of 2008. Employees who accepted these offers generally left the Company beginning April 1, 2008.
• We extended buyout offers to employees in selected Ford and ACH facilities during the fourth quarter of 2008. The majority of employees who accepted these offers left the Company by December 1, 2008.

These personnel reductions were coupled with other restructuring actions, such as cost improvements in manufacturing, engineering, warranty spending and advertising, as well as pension changes. Together, all of these actions helped us to exceed our goal of reducing cumulative annual North America Automotive operating costs by more than $5 billion (at constant volume, mix and exchange, excluding special items).