Ford 2006 Annual Report Download - page 16
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Please find page 16 of the 2006 Ford annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Also, in 2007, we have eliminated or plan to eliminate a shift at each of the Norfolk, Twin Cities, St. Thomas (Ontario)
and Michigan Truck assembly plants, and plan to add a third crew at the Dearborn Truck Assembly Plant to accommodate
additional F-150 truck production.
Additionally, we plan to sell or close all of the 13 remaining ACH plants by the end of 2008. Of these, we have entered
into nonbinding memoranda of understanding for the sale of three ACH plants.
Accelerating Product Development and Reducing Manufacturing Complexity
As part of our acceleration of the Way Forward plan, 70 percent of Ford, Lincoln, and Mercury products (by volume) in
North America will be new or significantly upgraded by the end of 2008 compared with 2006 models; these efforts will
include the expansion of our product lineup in growth segments such as crossover vehicles. We have most recently
introduced or will introduce in the next few months the following new models:
xFord North America: the all-new Ford Edge and Lincoln MKX crossover models, substantially new versions
of the Ford Expedition and Lincoln Navigator models, new models of our segment-leading Ford Super Duty
trucks, and new versions of the Lincoln MKZ sedan and Ford Escape and Mercury Mariner compact sport
utility vehicles and hybrids;
xFord Europe: the award-winning Ford S-MAX crossover vehicle (named "Car of the Year 2007" in Europe),
Galaxy minivan, and Transit truck (named "International Van of the Year 2007" in Europe); and
xPremier Automotive Group ("PAG"): Jaguar XKR coupe, Land Rover Freelander 2/LR2 SUVs, Volvo S80
sedan and Volvo C30 coupe.
In addition, we are continuing to invest in new gasoline, flexible-fuel, diesel, hydrogen, and hybrid powertrains, as well as
fuel-saving six-speed transmission technology.
We plan to accelerate the development of new products designed to meet shifting consumer preferences for more
fuel-efficient, smaller vehicles. To facilitate this, we have reorganized our product development activities into a unified
and integrated global organization that reports directly to our Chief Executive Officer, and we are developing a truly global
product plan that takes full advantage of our global product development assets, technologies and people. By leveraging
our scale, we will be able to apply our global product development capital and engineering resources to fewer vehicle
platforms, drivetrains and powertrains. This commonality of platforms, drivetrains and powertrains, in turn, will reduce
complexity in our vehicles and processes. Moreover, as we make our investments in new products, we will continue to
improve our production system's quality, productivity and flexibility.
Ford's I-4 Duratec engine family (1.8L through 2.5L) is an example of how commonality can work. The I-4 Duratec is
being used by Ford Europe (Focus and Mondeo models), Volvo (S40 model), Ford Asia Pacific (Focus and Volvo
S40 models), Ford North America (Focus, Escape/Mariner, Fusion/Milan models), and by Mazda Motor Corporation
("Mazda") in several of its vehicles. For the Ford-brand models, this is expected to represent production in 2007 of more
than 800,000 I-4 Duratec engines and annual production in the next few years of more than one million engines.
Obtaining and Maintaining Adequate Liquidity
As discussed below under "Liquidity and Capital Resources – Automotive Sector"and in Note 15 of the Notes to the
Financial Statements, we obtained $23.5 billion of new liquidity in December 2006, including proceeds from a convertible
debt offering of $4.95 billion, proceeds from a secured term loan of $7 billion and a secured revolving credit facility of
$11.5 billion. This resulted in total automotive liquidity of about $46 billion at year-end 2006, which we believe should
allow us to fund the restructuring and product development priorities discussed above, and provide us with a cushion for a
recession or other unforeseen events in the near term.