FORD MOTOR COMPANY INTRODUCTION: The Ford Motor Company is an American m ultinational corporation and the world's fifth largest automaker based on worldw ide vehicle sales, following Toyota, General Motors, Volkswagen and Hyundai-Kia. Based in Dearborn, Michigan, a suburb of Detroit, the automaker was founded by Henry Ford and incorporated on June 16, 1903. In addition to the Ford, Lincoln, and Mercury brands, Ford also owns Volvo Cars of Sweden, and a small stake in Ma zda of Japan and Aston Martin of England. Ford's former UK subsidiaries Jaguar a nd Land Rover were sold to Tata Motors of India in March 2008. Ford introduced methods for large-scale manufacturing of cars and large-scale ma nagement of an industrial workforce using elaborately engineered manufacturing s equences typified by moving assembly lines. Henry Ford's methods came to be know n around the world as Fordism by 1914. Ford is currently the fifth largest automaker in the world, directly behind Hyun dai-Kia.In 2007, Ford fell from second to third-ranked automaker in US sales for the first time in 56 years, behind only General Motors and Toyota. However, For d occasionally outsells Toyota on monthly periods (most recently, during the sum mer months of 2009). As of 2008, Ford has become the second largest automaker in Europe (only behind Volkswagen), with sales that occasionally exceed those in t he United States and large markets in Germany, Italy, and the United Kingdom. Fo rd is the seventh-ranked overall American-based company in the 2008 Fortune 500 list, based on global revenues in 2008 of $146.3 billion. In 2008, Ford produced 5.532 million automobiles and employed about 213,000 employees at around 90 pla nts and facilities worldwide. Starting in 2007, Ford received more initial quali ty survey awards from J. D. Power and Associates than any other automaker. Five of Ford's vehicles ranked at the top of their categories and fourteen vehicles r anked in the top three. HISTORY HENRY FORD FORD QUADRICYCLE (1896)

The Ford Motor Company was launched in a converted factory in 1903 with $28,000 in cash from twelve investors, most notably John and Horace Dodge (who would lat er found their own car company). Henry's first attempt under his name was the He

nry Ford Company on November 3, 1901, which became the Cadillac Motor Company on August 22, 1902. During its early years, the company produced just a few cars a day at its factory on Mack Avenue in Detroit, Michigan. Groups of two or three men worked on each car from components made to order by other companies. Henry F ord was 40 years old when he founded the Ford Motor Company, which would go on t o become one of the world's largest and most profitable companies, as well as be ing one to survive the Great Depression. As one of the largest family-controlled companies in the world, the Ford Motor Company has been in continuous family co ntrol for over 100 years. Ford Motor Company is one of the greatest automobile manufacturers of all time. They started under Henry Ford in Detroit, Michigan. Ford had a skill for craftsm anship when he built an experimental car in 1896. It was a twin cylinder engine with potential of 20 mph. In 1899 he left his job in order to organize the Detro it Automobile Company. Ford's first production was in 1903, the Model A, with an under the floor engine selling for $850. In the first season it sold 1,708 cars . Recent company developments During the mid to late 1990s, Ford sold large numbers of vehicles, in a booming American economy with soaring stock market and low fuel prices. With the dawn of the new century, legacy healthcare costs, higher fuel prices, and a faltering e conomy led to falling market shares, declining sales, and sliding profit margins . Most of the corporate profits came from financing consumer automobile loans th rough Ford Motor Credit Company. In December 2006, the company raised its borrowing capacity to about $25 billion , placing substantially all corporate assets as collateral to secure the line of credit. Chairman Bill Ford has stated that "bankruptcy is not an option". In or der to control its skyrocketing labor costs (the most expensive in the world), t he company and the United Auto Workers, representing approximately 46,000 hourly workers in North America, agreed to a historic contract settlement in November 2007 giving the company a substantial break in terms of its ongoing retiree heal th care costs and other economic issues. The agreement includes the establishmen t of a company-funded, independently-run Voluntary Employee Beneficiary Associat ion (more commonly known as a VEBA) trust to shift the burden of retiree health care from the company's books, thereby improving its balance sheet. However, thi s arrangement will not begin to take effect until January 1, 2010. The agreement also gives hourly workers the job security they were seeking by having the comp any commit to substantial investments in most of its factories. The automaker reported the largest annual loss in company history in 2006 of $12 .7 billion, and estimated that it would not return to profitability until 2009.H owever, Ford surprised Wall Street in the second quarter of 2007 by posting a $7 50 million profit. Despite the gains, the company finished the year with a $2.7 billion loss, largely attributed to finance restructuring at Volvo In June 2, 2008, Ford sold its Jaguar and Land Rover operations to Tata Motors f or $2.3 billion In January 2008, Ford launched a website listing the ten Built Ford Tough rules as well as a series of episodes that parodied the show COPS (TV Series). During November 2008, Ford, together with Chrysler and General Motors, sought fi nancial aid at Congressional hearings in Washington D.C. in the face of worsenin g conditions caused by the automotive industry crisis. The three companies prese nted action plans for the sustainability of the industry. The Detroit based auto makers were unsuccessful at obtaining assistance through Congressional legislati on. GM and Chrysler later received assistance through the Executive Branch from the T.A.R.P. funding provisions. On December 19, the cost of credit default swap s to insure the debt of Ford was 68 percent the sum insured for five years in ad dition to annual payments of 5 percent. That means it costs $6.8 million paid up front to insure $10 million in debt, in addition to payments of $500,000 per yea r In January 2009, Ford announced a $14.6 billion loss in the preceding year, ma king 2008 its worst year in history. Still, the company claimed to have sufficie nt liquidity to fund its business plans and thus, did not ask for government aid

. Through April 2009, Ford's strategy of debt for equity exchanges, erased $9.9 B in liabilities (28% of its total), in order to leverage its cash position. Thi s resulted in a $2.3 B 2nd Quarterly profit for 2009. AT PRESENT CEO

ALAN R MULALLY Born August 4, 1945 (age 64)Oakland, California Residence Michigan, USA Occupati on President and CEO of Ford Motor Company Salary US$2 million salary + US$18.5 million other compensation Alan Roger Mulally (born August 4, 1945) is an American engineer and businessman . He is currently the President and Chief Executive Officer of Ford Motor Compan y. Mulally was previously executive vice president of Boeing and the CEO of Boeing Commercial Airplanes (BCA). Mulally began his career with Boeing as an engineer in 1969. Mulally was largely credited with BCA's resurgence against Airbus in th e mid-2000s. Brands and Marques Today, Ford Motor Company manufactures automobiles under several names including Lincoln and Mercury in the United States. In 1958, Ford introduced a new marque , the Edsel, but poor sales led to its discontinuation in 1960. Later, in 1985, the Merkur brand was introduced to market Fords from Europe in the United States ; it met a similar fate in 1989. Ford has major manufacturing operations in Canada, Mexico, the United Kingdom, G ermany, Turkey, Brazil, Argentina, Australia, the People's Republic of China, an d several other countries, including South Africa where, following divestment du ring apartheid, it once again has a wholly owned subsidiary. Ford also has a coo perative agreement with Russian automaker GAZ. Ford acquired British sports car maker Aston Martin in 1989, but sold it on Marc h 12, 2007, retaining a small minority stake, and Volvo Cars of Sweden. In Novem ber 2008 it reduced its 33.4% Controlling interest in Mazda of Japan, to a 13.4% non-controlling interest. It shares an American joint venture plant in Flat Roc k, Michigan called Auto Alliance with Mazda. It has spun off its parts division under the name Visteon. Ford sold the United Kingdom-based Jaguar and Land Rover companies and brands to Tata Motors of India in March 2008.Also in 2008, Ford Motor is in negotiations with Shanghai Automotive Industry Corporation to sell its Volvo cars division. F ord's FoMoCo parts division sells aftermarket parts under the Motorcraft brand n ame. Ford's non-manufacturing operations include organizations such as automotive fin ance operation Ford Motor Credit Company. Ford also sponsors numerous events and sports facilities around the nation, most notably Ford Center in downtown Oklah oma City and Ford Field in downtown Detroit.Overall the Ford Motor Company contr ols the following operational car marques: Ford, Lincoln, Mercury, and Volvo Car s. Ford's (F) Mission Statement VISION: To become the world's leading consumer company for automotive products and servi ces. MISSION: We are a global family with a proud heritage passionately committed to providing

personal mobility for people around the world. We anticipate consumer need and deliver outstanding Products and services that improve peoples lives in order to develop an heritage passionately. VALUES: Our business is driven by our consumer focus, creativity, resourcefulness, and e ntrepreneurial spirit. We are an inspired, diverse team. We respect and value ev eryone's contribution. The health and safety of our people are paramount. We are a leader in environmental responsibility. Our integrity is never compromi sed and we make a positive contribution to society. We constantly strive to impr ove in everything we do. Guided by these values, we provide superior returns to our shareholders. Ford Motor Financial Statements Ford Motor Income Statement 2008 2007 2006 Revenue ($ mil.) 146,277.0 172,455.0 160,123.0 Gross Profit ($ mil.) 19,174.0 29,868.0 11,013.0 Operating Income ($ mil.) (4,722.0) 7,181.0 (6,268.0) Total Net Income ($ mil.) (14,672.0) (2,723.0) (12,613.0) Diluted EPS (Net Income) (6.46) (1.38) (6.72) Ford Motor Quarterly Statements Quarter Ending Jun 09 Quarter Revenue ($ mil.) 27,189.0 Gross Profit ($ mil.) 3,743.0 3,743.0 OperatingIncome ($ mil.) 4,057.0 TotalNetIncome ($ mil.) 2,261.0 2,261.0 DilutedEPS (Net Income) 0.69 0.69

Ending Jun 09 27,189.0 3,116.0 4,057.0 316.0 (1,416.0) (0.60)

Quarter Ending Mar 09 24,778.0

Ford Motor Stock Quote & Chart 09/04/09 15:00:17 EST • NYSE • 7.43 • 0.0000 • 0.0000 % Quotes delayed 15 minutes for NASDAQ. 20 minutes for NYSE and AMEX. Market Data provided by Interactive Data. Powered and Implemented by Interactive Data Manage d Solutions. Ford Motor Financial Ratios Company Industry Median Market Median1 Price/Sales Ratio 0.17 0.34 6.75 Price/Earnings Ratio (3.63) (21.69) 24.51 Price/Book Ratio (2.23) 1.42 6.49 Price/Cash Flow Ratio 2.54 3.85 42.02 Public companies trading on the New York Stock Exchange, the American Stock Exch ange, and the NASDAQ National Market.


FORD FOCUS: The deep blue paint sets off the Kyowa design 18 inch tires wrapped in toyo proxies rubber.

FORD FOCUS by street scene equipment

The du pout hot hues focus rests on a vogtland suspension & 18 inches Yokohama t ires mounted on R1 spider 18 inch wheels. FORD FOCUS by RKSport

RKSport functional extractor hood, lower ground effects, real sporter, rear wind ow spoiler & body color grille, all in BASF red & black. Focus on gun metal gray 20 inch TSW Kyalami wheels.


T stands for turbo but it might also stand for transcontinental. This ford focus put together by fox market will make the 2300 mile trip from New york to las Ve gas on its own power.

Current • • • • • • • • • • • •

Ford E85 Flexible Fuel Vehicles sold in North America and Europe are: Ford F-150 Ford Crown Victoria Ford Focus Ford C-MAX Ford Mondeo Ford S-MAX Ford Galaxy Ford Taurus Ford Ranger Ford Explorer Mercury Grand Marquis Lincoln Town Car

Current • • • • •

Ford E100 Flex sold in the Brazilian market are: Courier Ford EcoSport Ford Fiesta Ford Focus Ford Ka






Sales Calendar Year American sales 1999 4,163,369 2000 4,202,820 2001 3,971,364 2002 3,623,709

2003 2004 2005 2006 2007 2008

3,483,719 3,331,676 3,153,875 2,901,090 2,507,366 1,988,376

Ford Focuses on Every Target Market Many automakers have found success by expanding their product lines and targetin g as many consumers as possible. Take the Ford Motor Company, for example. Whi le most American auto companies are struggling right now, over the past 100 year s, a great deal of Ford’s success can be attributed to creating a different model car for each type of demographic, consistently positioning each brand for their intended target market. Ford has expanded their brand to include all target markets. This allows them to appeal to customers in many age ranges, income ranges, lifestyles, and demograp hics. By targeting many different groups, they can appeal to all customers, cap turing the whole market. 2008 Ford Shelby GT500KR While each Ford brand has different car models that target specific income and a ge ranges, the following brands generally speak to these car-buying lifestyles: Ford: The Ford brand is an American icon. They are known for offering a differ ent model vehicle for every price, style, efficiency, work load, gas mileage, or muscle. However, they are typically priced for the middle-class consumer that is interested in driving a sporty vehicle. They are currently trying to positio n themselves as the hybrid leader in the American market. Target age 18-50. Tar get income $30-100K. Mercury: More luxurious than the average Ford model. Generally for middle age d, established adults who are looking for luxury and smooth easy driving. Targe t age 35-50. Target income $60-100K. Lincoln: Each Lincoln vehicle represents sophistication and comfort. They targe t successful men and women that want recognition for their hard work. Cars come equip with the latest technology and plush interiors. Target age 18-50. Target income $100K+. Volvo: Geared toward the safety-conscious consumer. Perfect for customers who enjoy the outdoors and traveling in comfort. They are known as a family vehicle , as they offer solidity and reliability. Known for targeting customers who wan t a classy, affordable car that can guarantee safety and comfort. Target age 18 -50. Target income $60-100K+. Collaboration within the Automotive Industry Ultimately, we would like all automakers to take a coordinated approach to prote cting human rights and environmental conditions in the supply chain. We promoted cross-industry collaboration beginning in North America and now extending to gl obal manufacturers. Our view is that all participants in the supply chain – from t he original equipment manufacturers (OEMs) such as Ford, to the suppliers themse lves, to the government agencies that set and enforce the regulations governing operations – must be involved to make these efforts sustainable in the long run. S uch collective action will not only minimize costs and increase efficiency for O EMs and suppliers alike, but will lead to better results than if individual comp anies take steps in isolation. Automotive Industry Action Group Initiative Since 2004, Ford has worked with the AIAG to implement its capability-building p rogram with global suppliers with the intent of leveraging that work with other automakers (see diagram below). Ford has taken an "open book" approach to its su pply chain work and has contributed an "executive on loan" – the global manager of our Supply Chain Sustainability group – to the AIAG to support the industry's wor k and facilitate sharing what we have learned from working on these issues withi n our own operations. Materials developed within Ford to promote responsible wor king conditions have been offered to the group as a platform for use and develop

ment. In 2005, Ford, General Motors, Chrysler, Honda North America and Toyota No rth America began collaborative work to explore a cooperative industry approach to promoting decent working conditions in the supply chain Initiative participants have created a set of guidance statements to establish a shared industry voice on key working conditions issues. The statements cover th e core elements of individual companies' codes and policies, joint codes created by other industries and key international standards. The guidance statements co ver child labor, forced labor, freedom of association, harassment and discrimina tion, health and safety, wages and benefits, and working hours. These statements serve as a baseline agreed upon by all the participating OEMs and are used as a platform for training. It should be noted that Ford's specific expectations in the Ford CBWC for child labor exceed the expectations in the industry guidance s tatements. Products and Services We market our vehicles under the company's core and affiliated automotive brands to include Ford, Lincoln, Mercury, Volvo and Mazda. The company provides financ ial services through Ford Motor Credit Company. Quality Care, Motorcraft, Quick Lane and Extended Service Plan provide customer service support to our dealers.

Global Products Ford offers exciting vehicles in all regions of the world. Automotive Brands

Financial Services

Customer Services

Our Value Chain and Its Impacts As a major multinational enterprise, our activities have far-reaching impacts on environmental, social and economic systems. The diagram below organizes the iss ues by the major stages of our value chain. In this report you will also find a "materiality analysis" which prioritizes the most significant issues in our valu e chain. Some issues are not shown in this diagram because they do not pertain to a parti cular life-cycle stage. 1. PRODUCT PLANNING & DESIGN. 2. LOGISTICS ( Transportation). 3. RAW MATERIAL EXTRACTION. 4. PARTS & COMPENENTS. 5. ASSEMBLY & PAINTINGS. 6. SALES.

1 Product Planning and Design:

Principal actors in this stage • Ford • Customers • Government Environmental issues • Greenhouse gas emissions • Fuel economy • Smog-forming emissions • Material use and recycling • Resource use • Manufacturing waste • In-vehicle air quality Social issues • Vehicle safety • Access to mobility • Traffic congestion • Diversity • Infrastructure • Emerging markets • Design for assembly/ergonomics Economic issues • Quality • Brand value/reputation • Health care costs 2 Logistics (Transportation) Principal actors in this stage • Ford • Government Environmental issues • Greenhouse gas emissions • Smog-forming emissions • Land use Social issues • Vehicle safety • Health and safety • Treatment of employees • Noise • Community disruption through land use • Traffic congestion • Diversity • Infrastructure Economic issues • Fuel cost

3 Raw Material Extraction Principal actors in this stage • Suppliers • Government Environmental issues • Greenhouse gas emissions

• Smog-forming emissions • Resource use • Waste • Land use • Biodiversity impacts Social issues • Health and safety • Diversity • Human rights • HIV/AIDS • Community disruption through land use Economic issues • Commodity prices

4 Parts and Components Principal actors in this stage • Ford • Suppliers Environmental issues • Greenhouse gas emissions • Smog-forming emissions • Material use and recycling • Resource use • Manufacturing waste • Land use Social issues • Health and safety • Employee satisfaction • Diversity • Human rights • HIV/AIDS Economic issues • Quality • Brand value/reputation • Health care costs 5 Assembly and Painting Principal actors in this stage • Ford • Government Environmental issues • Greenhouse gas emissions • Smog-forming emissions (especially VOCs) • Material use and recycling • Resource use • Manufacturing waste Social issues • Health and safety • Employee satisfaction • Diversity • Human rights • HIV/AIDS • Community contributions Economic issues • Quality • Brand value/reputation

• Health care costs 6 Sales Principal actors in this stage • Ford dealers • Other dealers Environmental issues • Land use Social issues • Diversity • Human rights • Marketing and customer information Economic issues • Dealer services • Brand value/reputation • Purchase cost. Who Are Our Stakeholders? Employees At year-end 2008, we employed approximately 213,000 individuals at about 88 plan ts worldwide. Substantially all of the hourly employees in our Automotive operat ions in the United States are represented by unions and covered by collective ba rgaining agreements. Most hourly employees and many non management salaried empl oyees of our subsidiaries outside the United States are also represented by unio ns. These unions are key partners with Ford in providing a safe, productive and respectful workplace. Ford faces workplace health and safety challenges similar to those of many multi national manufacturing companies, including establishing and reinforcing high, c ommon expectations for the safety of our employees worldwide. Most of our manufa cturing facilities have joint union/management safety committees that guide the development and implementation of safety programs in their operations. Customers Ford's customers make us who we are. Ford Motor Company serves more than 5.4 mil lion customers worldwide. Our major regional markets include North America, Sout h America, Western Europe, Eastern Europe, Russia, Asia and Australia. In these regions, we serve three primary types of customers: individual retail c onsumers, small business customers and large commercial fleet customers. We will continue to expand our products and services for these existing customers while working simultaneously to gain new customers in emerging markets. In North Amer ica, we are focusing on increasing our offerings of smaller and more fuel-effici ent vehicles. In all of our markets, our customers' mobility needs and desires are changing fa ster than ever. Dealers Our dealers are the face of Ford to our customers and communities. They are key employers and contributors to local economies. Ford and Lincoln-Mercury dealers in the United States alone employed 170,134 people at the end of 2008, with an a nnual payroll of approximately $6.6 billion. Suppliers Suppliers are an integral part of our business, and our success is interdependen t with theirs. We rely on more than 2,000 production suppliers to provide many o f the parts that are assembled into Ford vehicles. Another 9,000 suppliers provi de a wide range of nonproduction goods and services, from industrial materials t o computers to advertising. Our supply base is increasingly global. We are expanding production in several r egions to serve the sales growth expected to occur in emerging markets. We are a lso expanding our sourcing in these lower-cost emerging markets, as a way to ser ve both local markets and the global supply chain. These changes, and our effort

s to ensure good working conditions in our supply chain, are discussed in detail in the Human Rights section of this report.

Communities Our Company impacts the communities in which we operate in numerous ways, from t he employment we provide and the taxes we pay, to the environmental and safety p erformance of our operations, to the ways in which we support and participate in civic life. Responsibly managing these impacts is not just about being a good n eighbor; it is fundamental to the success of our business. The communities in which we operate are composed of a diverse range of individua ls and groups. They include our customers, our employees, our business partners and their employees, government regulators, members of civil society and communi ty organizations, and those individuals who live and work around our facilities, among others. Developing and maintaining positive relationships with these vari ed groups is an important factor in our reputation and operational efficiency

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