Working Conditions in Our Supply Chain

Aligning Our Approach with Our Strategic Suppliers

Since 2005, we have made some significant changes in how we manage relationships with our suppliers and in the profile of the supply chain itself. While Ford's supply chain remains one of the largest and most complex in the world, we are taking steps to rationalize and streamline our supply base.

This strategic supplier strategy, which we call the Aligned Business Framework (ABF), is designed to create a sustainable business model to increase mutual profitability, improve quality and drive innovation. What it means in practice is that we are working more closely and collaboratively with a smaller number of global strategic suppliers. Ford has approved a total of 64 ABF suppliers, 10 of which are owned by minorities or women.

Ford's Code of Basic Working Conditions is an integral part of the new ABF, on par with other fundamental production requirements such as managing financial data and product quality. As previously, Ford's Global Strategic Suppliers are also required to adhere to our Global Terms and Conditions.

In addition, we expect ABF suppliers to develop:

• Their own working conditions code (if they do not have one already), aligned with Ford's Code of Basic Working Conditions
• Internal training and compliance processes supporting their code, and
• Training and compliance processes for their sub-tier suppliers

While the majority of ABF suppliers may have multiple policies or programs in place to manage some or all elements contained in Ford's Code of Basic Working Conditions, only a few have a concise, stand-alone code with consolidated supporting processes to efficiently communicate and manage working conditions, either within their own operations or those of their supply chain.

Ford has committed to providing suppliers with a range of support and assistance based on our experience in this area. We have developed an in-depth resource guide to give suppliers information and background on human rights, generally, and on the development of their own codes, specifically. We have also offered to share the training materials we have developed, as well as information on our compliance and training processes. Finally, we have committed to working with suppliers to help resolve issues or concerns.

During the fourth quarter of 2007, we held three working conditions summit meetings – in Dearborn, Amsterdam, and Hong Kong – that were attended by senior management from Ford and our ABF suppliers. These meetings further outlined our ABF strategy and the ways in which Ford will support and work collaboratively with our strategic suppliers on these commitments going forward.

We are particularly excited about this new phase, which furthers our efforts in managing human rights issues in our supply chain in a more collaborative, in-depth manner. In our view, it will help embed ownership for working conditions issues throughout our value chain, and lead to the development of more robust, sustainable management systems to support responsible working conditions across the automotive supply chain.