Building Supplier Capability

The primary focus of our work on human rights in our supply chain is building capability among our suppliers to responsibly manage working conditions. This includes meeting legal requirements and Ford's expectations, and promoting sound working conditions in their own facilities and supply chains. We have developed and delivered tailored training programs for Ford suppliers in select countries in cooperation with the Automotive Industry Action Group, a North American member-based, nonprofit industry group specializing in supply chain issues.

The training workshops emphasize the interpretation and application of legal standards and international best practice. By interacting with managers from the human resources, health and safety, labor affairs and legal departments of participating companies, the workshops provide for a two-way learning experience touching on the areas of interest for each company.

While Ford's supplier training sessions are customized to align with the unique laws, customs, cultures and needs of each location, in general they consist of:

• A day-long interactive workshop facilitated by qualified trainers and involving multiple automotive suppliers, in which participants develop and confirm an understanding of Ford expectations, local labor law, best practices and management systems
• A confirmed communication cascade for providing information obtained during the classroom training to all supplier personnel at each factory and direct sub-tier suppliers

During 2008, we held training workshops in China, Mexico and South Africa. Some 1,621 managers from 1,317 different supplier companies have completed a full day of training since the inception of the program in 2004. These suppliers have now moved on to the process of self-assessing their facilities for compliance with local law and Ford expectations, and completing the final stage of the program, which is communication to both workers and their own suppliers on the topic of working conditions expectations.

We continue to focus on the 17 countries we had previously identified as having higher risks of substandard working conditions. Among those countries, locations are prioritized based on production and sourcing trends, sales trends and relative perceived risk based on the input of human rights groups, other companies' experience and other geopolitical analysis. In 2009, we plan to conduct supplier training programs in Brazil, China, India, the Philippines, Romania, South Africa and Turkey.