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8 3
NOTES TO THE FINANCIAL STATEMENTS
The charges for employee separation actions were recognized in Cost of sales. The table below summarizes the pre-tax charges
incurred in 2004 for the employees separation actions described above, the related liability at December 31, 2004 and the
estimated total charges related to these actions (in millions):
Additionally, in 2002, we recognized a pre-tax charge of $173 million related to the transfer of Transit vehicle production to
Turkey, die-casting rationalization and other manufacturing actions in our Ford Europe and PAG segment. We also recognized
a pre-tax charge of $157 million in 2002 related to line speed reduction at our Halewood facilities and other efficiency actions
in our Ford Europe and PAG segment.
Dispositions. In 2002, we completed the sale of our interest in Kwik-Fit Holdings Ltd. (“Kwik-Fit”), a European all-makes vehicle
repair business, to an acquisition company formed by CVC Capital Partners. The sales price of £330 million (equivalent
to about $500 million) consisted of a combination of approximately $300 million in cash and a note with a face value of
approximately $200 million. We recognized a pre-tax loss of $519 million in cost of sales in 2002. Additionally, in 2002,
we acquired a 19% equity stake in the acquisition company. Our disposal of our interest in Kwik-Fit was not reflected as
a discontinued operation due to our continued involvement as an equity investor in the acquisition company. In 2003, we
recognized pre-tax income of $49 million related to the acceleration of payments received on the note.
Financial Services Sector
During 2004, Ford Credit announced a sales branch integration plan, which includes the consolidation of regional sales offices
and an integration of branch locations. The sales branch integration plan will be completed during 2006. The costs associated
with this restructuring action are reported in Operating and other expenses. The table below summarizes the pre-tax charge
incurred, the related liability at December 31, 2004 and the estimated total charges related to these actions (in millions):
NOTE 22. RETIREMENT BENEFITS
Employee Retirement and Savings Plans
We have two principal qualified defined benefit retirement plans in the U.S. The Ford-UAW Retirement Plan covers hourly
employees represented by the UAW, and the General Retirement Plan covers substantially all other Ford employees in the U.S
hired on or before December 31, 2003. The hourly plan provides noncontributory benefits related to employee service. The
salaried plan provides similar noncontributory benefits and contributory benefits related to pay and service. Other U.S. and
non-U.S. subsidiaries have separate plans that generally provide similar types of benefits for their employees. We established,
effective January 1, 2004, a defined contribution plan generally covering new salaried U.S. employees hired on or after that
date. Ford-UAW Retirement Plan expense accruals for UAW-represented Ford employees assigned to Visteon Corporation
(“Visteon Hourly Employees”) are charged to Visteon Corporation (“Visteon”), our largest supplier.
For our plans that provide benefits based on salary, we project employee future salary growth for such salary-related benefits.
Certain of our defined benefit pension plans provide benefits that are not based on salary (e.g., U.S. Ford-UAW Retirement
Plan, noncontributory portion of the U.S. General Retirement Plan, and Canada Ford-UAW Retirement Plan). The salary growth
assumption is not applicable to these benefits.
Plan obligations and costs are based on existing retirement plan provisions. No assumption is made regarding any potential
future changes to benefit provisions beyond those to which we are presently committed (e.g., in labor contracts).
In general, our plans are funded, with the main exceptions of certain plans in Germany and the U.S. defined benefit plans for
senior management. In such cases, an unfunded liability is recorded.
Segment
Liability
at December
31, 2003 Accrued
in 2004 Paid in 2004 Other
Liability
at December
31, 2004 Estimated
Total Costs
Ford Credit $ - $ 11 $ (1) $ - $ 10 $ 66
Liability
at December
31, 2003
Liability
at December
31, 2004Segment Accrued
in 2004 Paid in 2004 Other* Estimated
Total Costs
Ford Europe and PAG $ 354 $ 186 $ (273) $ 8 $ 275 $ 774
The Americas - 40 (40) - - 40
Total $ 354 $ 226 $ (313) $ 8 $ 275 $ 814
* Includes foreign currency translation adjustments.