Stakeholder Engagement

Stakeholder engagement takes place in countless formal and informal ways every day across our Company, from facility personnel's meetings with local community groups to market research with customers to convenings of Ford dealers and suppliers. (See Who Are Our Stakeholders for a profile of our major stakeholder groups and forums for engagement.)

At the corporate level, we use a variety of mechanisms to engage with stakeholders on sustainability issues. Some of these are informal and ad hoc – indeed, simply picking up the telephone to discuss an issue with any of the numerous sustainability-related organizations or individuals with whom Ford has a relationship is a part of our standard protocol. For example, during the Congressional debate over funding to the auto industry in late 2008, Ford's Director of Sustainable Business Strategies reached out to NGO stakeholders to brief them on the Company's report to Congress and the initiatives and product plans that were planned for early 2009.

Others engagement mechanisms are more formal:

• The creation of forums to gather stakeholder input on our activities, challenges and performance. For example, we work with stakeholder committees to help shape and provide feedback on our sustainability reports. We have also organized meetings with individuals and groups of stakeholders to solicit input on the key sustainability challenges and opportunities facing Ford. These and other engagements have been critical in shaping our sustainability strategy.
• Outreach on emerging and ongoing issues of particular importance to Ford or our stakeholders. We believe we have taken a thoughtful approach to our stakeholders as we work to improve tough situations. For example, stakeholder input has been critical to the development and testing of our approach to human rights over the past several years. Several organizations, notably the Interfaith Center on Corporate Responsibility, have been key partners with Ford, providing information, input and feedback at every step of the process, especially during conversations around shareholder resolutions (please see Melissa Forbes "voice" for more discussion). We did outreach to the United Nations Global Compact as we developed our strategy to be a global leader in human rights and have worked with stakeholders to address specific issues in the automotive industry supply chain (see the Human Rights section for more detail). We also devoted particular effort to engaging stakeholders on issues related to sustainable mobility, as described in the Mobility section of this report.
• Engagement with local stakeholders in the communities in which we operate as part of our Code of Basic Working Conditions assessment process.
• Consultation with organizations that have implemented campaigns targeting Ford.
• Engagement with rating and ranking organizations in the investment community. These have provided insight into external perspectives on some important issues and our relative performance in addressing them.
• Dialogue and, in many cases, ongoing cooperation with organizations that have filed shareholder resolutions on environmental and social issues. For example, during the 2008 proxy season, we received a proposal from The Sisters of St. Dominic of Caldwell, New Jersey, and other shareholders that asked the Company to adopt quantitative goals to reduce greenhouse gas emissions from the Company's products and operations and to report to shareholders on our plans to meet those goals. We received a second proposal from the Connecticut Retirement Plans & Trust Funds requesting that an independent committee of the Board of Directors of the Company assess the steps the Company is taking to meet new fuel economy and greenhouse gas emission standards for our fleet of cars and trucks, and to issue a report to shareholders. Following extensive engagement and detailed discussion of our CO2 modeling and product strategy, the shareholder proponents agreed with the Company to withdraw the proposals on the basis of commitments made to adopt and publish in this report quantitative goals for reducing greenhouse gas emissions; discuss the steps the Company is taking to meet new fuel economy and greenhouse gas emission standards for our fleet of cars and trucks; and continue the dialogue with the proponents on this important issue.
• During the 2009 proxy season, Ford received eight shareholder proposals, some of which pertained to public policy (e.g. health care reform) or governance issues (e.g. shareholder voting rights). For details of the proposals and the Company's response, please see the Notice of 2009 Annual Meeting of Shareholders and Proxy Statement.

Employees

Substantially all of our hourly employees in our automotive operations in the United States are represented by labor unions. Most hourly employees and many nonmanagement salaried employees of our subsidiaries outside of the United States also are represented by unions. We work closely with these unions to develop agreements and governance plans through a collective bargaining process. Policy and procedures involving information, consultation and negotiations with employees over changes in the reporting organization's operations (e.g., reorganization, plant shutdown, employee transfers and reductions) are negotiated with the appropriate union. In addition, joint labor-management committees are set up at each plant to give employees an opportunity to influence working conditions and practices.

Most of our salaried employees are not covered by union agreements. We have a strong Code of Conduct and comprehensive Policy Letters and Directives covering topics, including diversity, relevant to our employees. We also practice regular two-way communication with all employees through weekly webcasts, quarterly town hall meetings, manager-to-employee business cascades, surveys and informal communications, and we survey our salaried employees annually, as discussed in the Society section.

We provide learning and development opportunities for our employees, so they can develop general professional and functional/technical competencies as well as core leadership competencies for those in supervisory or managerial positions.

Customers

Maintaining good relationships with our customers is one of our most important activities. We provide a variety of means for customers to reach us, including mail, email and toll-free phone. We also reach out to customers and potential customers through focus groups and other market research, and we track customer satisfaction as described in the Society section.

We also gather online, consumer-generated content to learn what consumers are saying about both our Company and the industry in general. Increasingly, customers are using these electronic media – including Web sites, discussion groups and blogs – to research, discuss and problem-solve topics related to their current vehicles and those they are interested in purchasing. During 2008, we began to participate more actively in this social media arena and to monitor consumer-generated content found online. Summary reports are developed based on what we find and gather online, to convey what consumers are saying about our Company and our products. These reports are cascaded throughout the Company – from brand managers and product development engineers all the way up to senior-level management.

In addition to listening to what customers are saying online, we are also increasingly sharing information and engaging in discussions in Web-based forums and discussion groups. In an effort to accomplish authentic interaction between the Company and Web users, we are democratizing our social media efforts to enable any Ford employee to interact in online communities on our behalf. Beginning in 2009, we will train employees in how to do this, giving them clear guidelines consistent with our One Ford principles. Our goal is to become the world's leading social automotive brand and to humanize the Company by building relationships with our customers through these kinds of social media communications.

Investors

We provide information to and interact regularly with investors through a variety of means, including our corporate Web site, annual report and regulatory filings, annual meeting and periodic analyst conference calls. We also engage with socially responsible investment organizations that are seeking information to use to evaluate our sustainability performance. These interactions help us stay abreast of and respond to investor concerns. (See the Economy section for a discussion of investor ratings and feedback.)

Dealers

Dealer Relations is a key priority. The Dealer Council was created as a forum for open dialogue between Dealer Council members and Ford Motor Company. Through the council process, dealers can voice their concerns, needs and ideas for working more productively as a team. To ensure communication lines remain open, Dealer Council members also participate as members of National Dealer Advisory Panels, including:

• Customer Viewpoint Advisory Panel – customer satisfaction rating system, Viewpoint survey
• Product Committee – current and future product cycle plan, including lineup, design, styling and color/trim
• Order Complexity Task Force – reduction of vehicle ordering complexity, order guide simplification
• Marketing Dealer Advisory Board (MDAB) – vehicle packaging strategy, advertising creative, incentive programs
• Training Advisory Board (TAB) – dealership employee training and recognition
• Parts and Service Manager Advisory Committee (PSMAC) – fixed operations programs including employee recognition/retention
• Commercial Truck Advisory Board – sales, marketing and product programs

The feedback gathered through these interactions has helped us develop various programs, change policies and enhance processes to improve customer handling and other significant elements of the dealers' business. Dealer priorities and Ford management responses are published annually, providing transparency to discussions between the Company and its dealers.

Communities

To effectively and sustainably manage community relations issues, we must embed them in our core business practices and seek to manage them with the same rigor as other aspects of our business.

In recent years, we have taken steps to develop a more integrated approach to managing the different dimensions of our community involvement. Our goal is to more closely connect our traditional community relations programs, community impact assessment processes and human rights efforts. Over time, we also want to link all of these efforts with our development of new products and services to meet the unique mobility needs of communities in emerging markets. In our view, this approach will not only increase efficiencies, but also maximize our impact and effectiveness.

The release of our Code of Basic Working Conditions (CBWC) as a formal Policy Letter reinforced that our behaviors and actions include a focus on issues outside the walls of our plants and facilities. The performance criteria for CBWC assessments of owned and operated facilities now address several key community issues and evaluate engagement with members of the local community.

Our work to develop and implement the CBWC has helped establish our trustworthiness in communities in which we are developing our sustainable mobility strategy. In our view, developing a deep understanding of the unique mobility needs of emerging markets is a pre-condition of being able to do business in those places.