Increasing Global Integration

Globally integrating our product development, manufacturing, purchasing and marketing efforts is key to delivering high-quality, innovative and desirable products quickly and cost effectively.

In 2009, we made changes to our Global Marketing organization to create a more consistent and compelling connection with customers worldwide, while better leveraging the Company's global assets and capabilities. As part of these changes, we named Elena Ford as director of Global Marketing, Sales and Service Operations, reporting directly to Jim Farley, Ford's group vice president of Marketing and Communications. This follows previous steps we made in 2007 and 2008 to improve the global integration of our operations, including naming Joe Hinrichs as group vice president for Global Manufacturing. We also reorganized senior leaders in the product development and purchasing organizations to assign global responsibility for key vehicle segments and major purchasing functions, and globally integrated our regional research and product development organizations.

Going forward, we will be delivering more vehicles worldwide from fewer core platforms. By 2010, approximately 40 percent of Ford's entries into the car and van segments will be shared between Ford North America and Ford Europe, with full alignment achieved by 2013. These vehicles include the Fiesta- and Focus-sized small cars, Fusion- and Mondeo-sized midsize cars, crossovers, utility vehicles and commercial vans. In the next five years we will build 1 million units a year from our global "B-car" platform, and nearly 2 million units a year from our global "C-car" platform. For example, the Ford Fiesta, our new global "B-car," was introduced in Europe in 2008 and has since also gone on sale in South Africa, Australia, New Zealand and China. It will be introduced in other key Asian markets and North America in 2010. Since launching in Europe in November 2008, the Fiesta has been the bestselling vehicle in the UK and has significantly driven our European sales successes. In 2009, we are also bringing the highly successful Transit Connect commercial van from Europe to the United States. And, in 2010, we will introduce the new Ford Focus global small car simultaneously in North America, Europe and Asia. This vehicle will also be introduced as a battery electric vehicle in the United States in 2011.

We are also planning the global implementation of EcoBoost™, our new fuel-efficient engine technology. This technology will launch in the United States in 2009 on the Lincoln MKS, Lincoln MKT, Ford Taurus SHO and Ford Flex. In early 2010 we will implement EcoBoost in Europe, and by 2013, Ford will have annual volumes of 1.3 million EcoBoost V-6 and I-4 engines globally.

We will begin implementing our highly successful SYNC® in-vehicle communication and entertainment system globally in 2010, beginning with Europe and the migrating to Asia Pacific and Australia. To date, Ford has built more than 1 million SYNC-equipped vehicles.

We are also increasing the global integration of our Quality Operating System. In 2008, for example, we completed the global implementation of a standardized quality system that replaced former regional systems. By requiring standardized processes and implementation everywhere we operate, we can continue and expand our world-class quality results.

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 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.

By leveraging our global operations, we will be able to deploy our global product development capital and engineering resources to fewer vehicle platforms, drivetrains and powertrains. This commonality of platforms, drivetrains and powertrains, in turn, will reduce complexity in our vehicles and processes. All of these efforts will reduce costs and increase quality.