Supply Chain Sustainability

We are working with our core suppliers to improve the sustainability of their products and processes. Much of our work with core suppliers thus far has focused on helping them align with Ford's Code of Basic Working Conditions. However, we are also encouraging our suppliers to improve other aspects of their environmental and social sustainability. In 2008, for example, we held two sustainability sessions in Troy, Michigan, which were attended by senior management from Ford and our core Aligned Business Framework suppliers. Topics covered in these meetings included internal training development guidance and a review of key emerging environmental and sustainability topics of interest to Ford and our suppliers.

We are also working with our suppliers to increase their use of sustainable materials and eliminate undesirable materials. While Ford has already made great strides in using more sustainable materials (as discussed in the Sustainable Materials section), we can expand these efforts by systematically working with our suppliers on sustainable materials. Towards that end, we are developing Commodity Business Plans and other materials purchasing strategies that require the use of sustainable materials. For example, we developed a purchasing strategy for recycled plastics resins and Commodity Business Plans for relevant parts that require the use of post-consumer recycled plastics. Beginning in 2009, all underbody aerodynamics shields, splash shields, stone pecking cuffs and radiator air deflector shields manufactured in North America will have to be made from the approved recycled plastics.

In Europe and North America, we have added environmental requirements to the formal agreements we make with our suppliers. These requirements cover a range of issues, such as reducing materials of concern, using Design for Sustainability principles, increasing the use of sustainable materials and using materials that will improve vehicle interior air quality. We ask suppliers to use recycled materials whenever technically and economically feasible. All recycled materials are evaluated in-house to guarantee they deliver appropriate mechanical properties and the same level of performance that would be obtained with virgin materials.