Systematic Leadership

The "leadership" in Health and Safety Leadership reflects our view that leaders at all levels achieve the safety results they expect and demand. When leaders demand safe behaviors and conditions, everyone develops a zero-injury mindset. We seek to build safety leaders at all levels in the organization.

We consider systematic leadership to have three components: governance, evaluation and accountability.

Governance

We have comprehensive governance systems for health and safety management. Our overarching Occupational Health and Safety (OHS) policy is established through a corporate Policy Letter and Directives. In addition, global OHS standards cover all health and safety topics, including safety, ergonomics, occupational hygiene, toxicology, clinical operations, fire and security.

The most efficient and cost-effective way to reduce safety and ergonomic risks in the manufacturing process is to engineer them out upfront. Our global manufacturing engineering teams use the latest technology of "virtual manufacturing" to predict and eliminate risks during the design stage.

We have strengthened our global governance of workplace health and safety by reviewing key health and safety indicators more frequently with senior management. We review safety regularly at the plant level and in regional OHS committees. Our President and CEO and senior operating team review safety performance as part of their regular Business Plan Review, as does the global Manufacturing Operating Committee.

Evaluation

Health and safety specialists conduct Safety and Health Assessment Review Process (SHARP) audits at our manufacturing facilities as an integral part of our manufacturing management systems. During 2008, we launched a major global revision of SHARP to streamline and simplify it and align it with Ford's current corporate standards and plant operating systems. The SHARP audit is now more similar to other internationally recognized management systems documents. To supplement SHARP, we developed during 2009 a global Safety Operating System to assist our plants in identifying all the tasks required by our safety standards and how they should be managed.

We also conduct unannounced audits, as well as audits of special high-risk areas. Facility staff perform SHARP self-assessments and more frequent internal audits to verify key processes. Any significant incidents are reported weekly on a global basis so plant managers at other facilities can learn from each incident and take preventive action.

Nonmanufacturing sites conduct yearly self-assessments of their OHS risks and performance. All sites must respond to a series of safety questions that have been integrated into the Ford General Auditor's Office basic audit review program.

We also conduct a safety culture survey, which was recently integrated into our overall annual Pulse survey of employees, to assess employee perceptions of our health and safety effectiveness. The results of this survey, combined with audits and routine gathering and sharing of performance data, provide a comprehensive picture of health and safety performance trends, as well as early warning of conditions that could lead to a decline in performance. The results of the 2009 Pulse survey show that the vast majority of Ford employees – 85 percent – are satisfied with the Company's safety culture.

Accountability

We establish accountability for health and safety performance through our business planning and scorecard processes, which set targets and assign responsibility for meeting those targets. Business Operation and plant managers are responsible for health and safety in the operations they manage, and their performance in this area is a significant factor in their incentive compensation. In addition, safety performance is included in the scorecards of salaried employees as appropriate, including those of the CEO and business unit leaders.

We have also increased accountability expectations for plant workers, which has contributed to the long-term reduction in serious work injuries. In the spring of 2008, for example, we imposed stricter penalties for workers who break safety rules that could result in serious or fatal injuries, despite the training they have received. Flagrant violators are liable for suspension or termination – even on a first offense. Since the introduction of these penalties in North America, we have seen a drop in serious injuries resulting from energy control and power lockout violations, from nine injuries in 2007 to three in 2009.