Progress and Data

While this has been a difficult year for Ford economically, we have made significant progress toward our financial recovery goals, and we continue to deliver new, high-quality, innovative and desirable products to changing global markets.

Since our 2006/7 report, we have continued to increase sales in rapidly growing markets. For example, in 2007 our Ford, Lincoln, Volvo, Jaguar and Land Rover sales in China rose 30 percent. Our passenger car joint venture in China – Changan Ford Mazda Automobile – posted a record year, with wholesale deliveries rising more than 60 percent. In South America, sales rose 19 percent in 2007. We are continuing to launch new products in these and other rapidly growing markets to meet growing customer demand. We are also working to offer innovative mobility services in several markets, as discussed in the Mobility section.

We are also demonstrating our ability to compete successfully in mature markets in the U.S. and Europe by offering innovative, desirable products. In the United States, sales of crossover vehicles – the fastest-growing market segment – increased 62 percent compared to 2006. In Europe, total vehicle sales rose 5 percent in 2007.

In 2007 and 2008 Ford delivered further gains in quality and customer satisfaction. According to the Global Quality Research System (GQRS), the industry's primary third-party assessment of quality, the initial quality ratings for Ford, Lincoln and Mercury brand vehicles are better than or equal to all other automakers, including Toyota and Honda. This survey tracks customers' overall satisfaction with their new vehicles after the first three months of ownership. The GQRS also named five Ford, Lincoln and Mercury vehicles as "best-in-segment" leaders for quality and/or customer satisfaction, and 15 of our vehicles were in the top three for quality and/or customer satisfaction in their respective segments.

We are continuing to cut costs while delivering products with world-class quality, new designs and innovative new technologies. And we are continuing to accelerate the pace of new product launches; by the end of 2008, 70 percent of Ford, Lincoln and Mercury products (by volume) in North America will be new or significantly upgraded compared with 2006 models.

In 2007 we reached a new agreement with the United Auto Workers (UAW) union that significantly improves Ford's competitiveness and allows the Company to continue to pursue its restructuring efforts. This agreement provides for additional flexible manufacturing facilities and allows Ford to permanently shift responsibility for providing retiree health care benefits for current and former UAW-represented employees from the Company to a new retiree plan. The retiree plan will be funded by a new independent Voluntary Employee Benefit Association Trust. This new agreement will significantly reduce costs, improve our balance sheet and improve our ability to cost-effectively develop and launch the new products that customers desire.