Ford 2007 Annual Report Download - page 17

Management’s Discussion and Analysis of Financial Condition and Results of Operations
Ford Motor Company | 2007 Annual Report 15
Job Security. Our obligation to pay substantially full wages and benefits to idled UAW-represented employees ("Jobs
Bank Benefits") continues, unless within two years from the date of the new CBA we offer an employee one job (in the
employee declines to accept the other employment at the other facility or facilities. If these conditions are not met within
the two-year period ending in November 2009, the employee will be entitled to receive Jobs Bank Benefits for the duration
of the term of the current CBA until one additional alternate job offer is made.
Plant Closures. As part of our Way Forward plan, we announced plans to idle 16 North American manufacturing
facilities by the end of 2012. As part of the Agreements, certain facilities that we had planned to idle will remain open, and
we agreed not to close or sell any additional U.S. plants – beyond the manufacturing plants and ACH facilities (described
above) that we had previously announced would be closed or sold – during the four-year term of the CBA.
Bonuses to UAW-Represented Hourly Employees. We agreed to provide a lump-sum payment of $3,000 to each
UAW-represented hourly employee who is on our active rolls as of the date specified in the Agreements, as well as
performance and other bonus payments in the future according to a specified schedule set forth in the Agreements. We
accrued and paid most of this bonus obligation aggregating $157 million in the fourth quarter of 2007.
Accelerate Development of New Products our Customers Want and Value
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 are also committed to
introducing new products that customers want and value and have most recently introduced or will introduce in the next
several months the following new models and products:
• Ford North America: the all-new (for 2007) Ford Edge and Lincoln MKX crossover models, new versions of the
2007 Ford Expedition and Lincoln Navigator models, new 2008 models of our segment-leading Ford Super Duty
trucks, new versions of the 2008 Ford Escape and Mercury Mariner compact sport utility vehicles and hybrids;
new versions of the 2008 Ford Focus; the all-new 2009 Ford Flex full-size crossover model; the all-new 2009
Lincoln MKS full-size sedan; and new 2009 models of our segment-leading F-150 pickup trucks.
• Ford Europe: the all-new Mondeo large passenger car (launched in 2007), the new Focus medium passenger car
and all-new Kuga 4x4 crossover vehicle (both to be launched in early 2008), followed later in the year by the
launch of our new Fiesta compact car and a new sub-compact car.
• Volvo: for 2007, the all-new V70 estate (i.e., wagon) and XC70 crossover and the new V50 estate and S40
sedan, and, for 2008, the all-new XC60 crossover, one of the first entries in the small premium utility segment.
• New Vehicle Technologies: in 2007 we introduced in select models Ford SYNC – a fully-integrated, voice-activated
in-car communications and entertainment system developed in association with Microsoft Corporation. By the end
of 2008, we plan to have Ford SYNC available in nearly every Ford, Lincoln and Mercury model in North America.
In 2009, we plan to introduce on the Lincoln MKS the first of our new EcoBoost family of gasoline engines. This
engine technology combines turbo-boosting and direct fuel-injection, which will allow for engines with fewer
cylinders or a smaller displacement so as to improve fuel economy by up to 20% and reduce CO2 emissions by up
to 15%, while at the same time improving or maintaining (as compared with larger engines) vehicle performance
(i.e., torque or acceleration). Within the next five years we expect to produce around 500,000 vehicles with
EcoBoost technology annually, which we believe will allow us to satisfy increasing consumer demand for improved
fuel efficiency without sacrificing vehicle performance, and meet increasingly stringent government-mandated fuel
economy and emission standards. In addition, we are continuing to invest in other 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. One goal, for example, is to reduce the average age of Ford-brand vehicles in North America
by 35% by 2009 compared with 2006. 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.
case of employees at an idled facility) or two jobs (in the case of any other employee) at other Ford facilities and that