Ford 2007 Annual Report Download - page 18

Management’s Discussion and Analysis of Financial Condition and Results of Operations
16 Ford Motor Company | 2007 Annual Report
By leveraging our scale, we will be able to deploy 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.
As an example of how commonality can work for us, the new Fiesta compact car that we are introducing in Europe in
2008 also will be offered for sale in all major markets, including the United States, over the next few years.
Finance our Plan and Improve our Balance Sheet
As discussed in "Liquidity and Capital Resources – Automotive Sector" and in Note 16 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. During 2007, also as discussed in “Liquidity and Capital Resources – Automotive Sector” we took actions to
reduce Automotive long-term debt by $2.7 billion and monetized our investments in certain non-core assets (e.g., Aston
Martin Lagonda Group Limited ("Aston Martin") and Automotive Protection Corporation ("APCO")). At year-end 2007, we
had total Automotive liquidity, consisting of gross cash and available credit facilities, of about $46.5 billion, 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.
Work Together Effectively as One Team
Our global management team is focused on a single, company-wide global business plan that establishes clear
performance goals for the entire Company. We refer to this as "One Team, One Plan, One Goal." This requires all
functions – product development, purchasing, information technology, manufacturing, etc. – across the globe to work
together as a single, cohesive team and be accountable to meet the performance goals established by our business plan.
To facilitate this, our senior management team meets weekly to assess our progress against the business plan goals,
to identify risks to meeting and opportunities for exceeding those goals, and to make decisions about actions to take to
mitigate risks or implement opportunities to stay on track to meet or exceed those goals.
Financial Impact and Assumptions
Execution of the four priorities discussed above is expected to result in our Ford North America segment, and our
Automotive sector overall, being profitable in 2009. This projection is based on the following operating assumptions in the
2008 and 2009 time period:
• Sales volume and mix of products stabilizing in North America, with U.S. market share for 2008 at the low-end
of the 14% to 15% range for Ford, Lincoln and Mercury brands.
• Cumulative reduction in annual operating costs for our Ford North America segment of about $5 billion (at
constant volume, mix and exchange, and excluding special items) by the end of 2008 compared with 2005,
with additional cost reductions in 2009 and beyond.
For a discussion of our liquidity needs and uses during this period, see "Liquidity and Capital Resources – Automotive
Sector." For a discussion of the outlook for our 2008 full-year performance, see "Outlook."