North American Restructuring

During 2006 and 2007, we reduced by about 46,300 the employment levels in our Ford North America business unit. Most of these reductions were the result of offers of early retirement or separation packages to U.S. employees, including Ford employees at our Automotive Component Holding (ACH) plants.

Although we have achieved our previously announced goal to operate with 55,000 to 60,000 hourly non-ACH employees in North America by the end of 2008, we have embarked on additional personnel reduction actions, as announced on January 24, 2008, to achieve even lower hourly employment levels in North America. We also have reduced and realigned our vehicle assembly capacity to bring it more in line with demand and shifting customer preferences. As part of this reduction, we have closed or announced plans to close nine North American manufacturing facilities.

We believe we handled the separations of our workforce and manufacturing base with respect for the people and communities affected. For example, we offered UAW-represented employees a selection of eight different voluntary separation packages, including four traditional offers (such as early retirement) and four innovative programs designed to help employees' transition to new jobs requiring new skills. About half the employees who left the Company in 2006 and 2007 chose a nontraditional package. Other actions we took to handle the downsizing responsibly are detailed elsewhere in this report.