FINANCIAL / INVESTOR
COMMUNITY MEETING
COMMUNITY MEETING
Derrick Kuzak
Group Vice President, Global Product Development
January 16, 2008
Our Plan
• Aggressively restructure to operate
profitably at lower demand and changing
model mix
profitably at lower demand and changing
model mix
• Accelerate the development of new
products that customers want and prefer
products that customers want and prefer
• Finance our plan and improve our balance
sheet
sheet
• Work together
Agenda
• How We Plan
• How We Work - Achieving World Class
Efficiency
Efficiency
• Products and Technologies We Are
Delivering
Delivering
How We Plan:
Global Product Plan Principles
Global Product Plan Principles
Goal
Principles
Ensure a customer view of success
• Achieve benchmark levels of:
– % of volume new or significantly freshened
– Average age of portfolio
– Number of unique showroom nameplates
• Achieve benchmark cadence of timing and
scope of product change: 3/6/9/12 year
cadence
scope of product change: 3/6/9/12 year
cadence
Reduce investment through
simplification and increased efficiency
simplification and increased efficiency
• Achieve benchmark levels of:
– Platforms
– Powertrain architectures and combinations
– Order guide complexity
• Ford Brand vehicles shared globally
• Fully differentiated Ford-to-Lincoln vehicles
• Investment at benchmark levels
Ford
Lincoln
2006
2007
2008
2009
2010
2011
Memo: Toyota 3.1 - 4.2 yrs, Chevy 3.9 - 4.8 yrs
35% Improvement
Average Age of Portfolio (Years)
Metric Performance (Global Ford)
Volume per Platform Family
Core Platforms
Total Platforms
Memo: Toyota 400K - 570K |
Memo: Toyota 18 - 15 |
2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 |
Platform families reduce through the period.
Average volume per core platform will continue to increase.
15% Improvement
100% Improvement
• Commonality
• Part re-use and modular designs
• Complexity Reduction
• Orderable combinations
• Platform reductions
• Procurement Efficiencies
• Low-cost country die sourcing
• Direct tool sourcing with cost models
• On-line quoting for tools
• Direct gage sourcing / Generic gage designs
• Plant Manufacturing
• Physical-based costing
• Digital pre-assembly validation
• Flexible automation: body shop, plant facilities
• Engineering
• Low-cost country engineering
• Prototype construction reductions
• CAE validation vs. physical validation
• Production tool pull-ahead in lieu of prototype
tooling
tooling
• Global engineering
Investment Efficiency Improvement
How We Work -
Achieving World Class Efficiency
Achieving World Class Efficiency
Product Development Objectives
Efficiency
Output
Input
# Programs
Engineering Costs
=
=
More exciting products, Greater efficiency, Less cost
Efficiency Improvement Actions
• Global Product Development System
• First-time Through Capability
• Improved Virtual Capabilities
• Global Product Development
• Engineering Footprint Migration
• Giving Engineers Time To Engineer
GPDS - Accelerating Product Development
Calendar Year | 2004 | 2006 | 2008+ |
New Top Hat | Base | 24% faster | 49% faster |
All New Vehicle (Top Hat + Platform) | Base | 19% faster | 27% faster |
Improved Virtual Capability
• Overall prototype spending cut in HALF over 3 year period
– 35% fewer prototype vehicles (Increased Virtual Capability and Commonality)
– 20% less cost per unit (Increased Commonality)
– 20% less spending on prototype tooling (Increased Virtual and Commonality)
Top Hat Content and
Vehicle Integration
Systems/Commodities
Shared within Platforms
Lead Engineering/
Purchasing D&R
Single Lead
Design and Engineering
Activity for all Top Hats
of each Platform
Single Lead
Engineering Activity for
each Platform
Single Lead
For each
system
system
• Body
• Chassis
• E/E
• P/T
Global Product Development -
How We Are Working
Product Strategy
• Bold, emotive exterior designs
• Great to drive
• Great to sit in
- Comfort and convenience of a second home on
wheels
wheels
- Remarkably quiet
• Fuel Economy as a reason to buy
• Unmistakably a Ford or Lincoln in look, sound, feel
• All with exceptional value
Products and Technologies
We Are Delivering
We Are Delivering
Design Leadership … What It Takes
• New design process, focused on target
customer and design progressives
customer and design progressives
• Engineering creativity and resolve to
deliver winning designs
deliver winning designs
• Brand aligned, consistent Design DNA
• Exciting designs - “unexpected from Ford”
- that bring customers to the showroom
- that bring customers to the showroom
Design Leadership: Millimeters Matter
Product DNA … Unmistakably a Ford
in Look, Sound, Feel
in Look, Sound, Feel
Product DNA - Attributes
• Accommodation and Usage
- Driver and Passenger
Accommodation
Accommodation
- Primary and Secondary
Controls
Controls
- Stowage
- Seat Comfort
• Perceived Quality
- Switch Feel
- Illumination
- Material Feel
- Welcome Strategy
• Vehicle Human-Machine Interface
- Perception
- Controllability
- Comprehensibility
• Vehicle Dynamics
- Ride
- Steering
- Handling
- Braking
• Vehicle NVH
- Powertrain Sound Quality
- Door Closing Sound
- Chimes
• Performance and Driveability
- Performance Feel
- Driveability
Product DNA:
Designing Seats with DNA
Designing Seats with DNA
A Clear Technology Strategy To Set
Priorities And Guide Actions
Priorities And Guide Actions
A Clear Technology Strategy To Set
Priorities And Guide Actions
Priorities And Guide Actions
Sustainability
“Greener Miles”
• Achieving
substantial CO2 and
fuel economy
improvement by
2015
substantial CO2 and
fuel economy
improvement by
2015
• Improving interior air
quality
quality
• Maximizing use of
renewable resources
renewable resources
Safety
“Safer Miles”
• Achieving Consumer
Reports Top
Recommended Buy
Reports Top
Recommended Buy
• Introducing highly
valued, breakthrough
and differentiated
features
valued, breakthrough
and differentiated
features
Design
“Bolder Miles”
• Exciting interiors
and exteriors
aligned to Brand
and exteriors
aligned to Brand
• Leveraging global
platforms with the
right proportions
platforms with the
right proportions
• Achieving design
leadership
leadership
Highlights:
• Exclusivity with Microsoft until November
2008.
2008.
• SYNC is already available today on 12 Ford,
Lincoln and Mercury vehicles. By the end of
2008, it will be offered on nearly every new
Ford, Lincoln and Mercury vehicle.
Lincoln and Mercury vehicles. By the end of
2008, it will be offered on nearly every new
Ford, Lincoln and Mercury vehicle.
• Standard on Lincoln & High-Series
Ford/Mercury vehicles.
Ford/Mercury vehicles.
• 911 Assist available on some 2009MY Ford,
Lincoln and Mercury vehicles.
Lincoln and Mercury vehicles.
• Many awards, including Popular Mechanics
“Automotive Excellence” and “Breakthrough”;
Bluetooth Special Interest Group “Best of CES
2008”; CNET “Best of CES” (2007).
“Automotive Excellence” and “Breakthrough”;
Bluetooth Special Interest Group “Best of CES
2008”; CNET “Best of CES” (2007).
Best-in-Class media device and hands-free phone connectivity
system co-branded with Microsoft.
system co-branded with Microsoft.
“SYNC” Media Gateway Module
“SYNC” Media Gateway Module
Ford will be the first OEM to offer Sony branded audio in North America
and will include a signature electronics finish panel design
and will include a signature electronics finish panel design
Highlights
• Launches 2008CY on the 2009MY
F-150 and Flex
F-150 and Flex
• Full migration on all retail Ford and
Mercury vehicles (including
imports)
Mercury vehicles (including
imports)
• Sony brand rated #1 most powerful
brand in the 2007 Brand Power
study
brand in the 2007 Brand Power
study
• Partnership poised to leverage co-
marketing and technology sharing
opportunities
marketing and technology sharing
opportunities
Sony Branded Audio
Sony Branded Audio
Next-Generation
Navigation System
Navigation System
Custom Connectivity
Custom Connectivity
• Advanced voice-recognition technology
• Advanced voice-recognition technology
• Personal juke box that can store up to 2,400 songs
• Personal juke box that can store up to 2,400 songs
• New 8-inch touch-screen display
• New 8-inch touch-screen display
SIRIUS Travel Link
§ Up-to-the-minute information
and entertainment
and entertainment
§ Current gas prices from an
estimated 120,000 filling
stations
estimated 120,000 filling
stations
§ Local, real-time traffic
information for 78 markets
information for 78 markets
§ Coast-to-coast weather
conditions with five-day
forecasts
conditions with five-day
forecasts
§ Personalized sports scores and
schedules
schedules
§ Movie listing details, including
times, theater addresses,
ratings and running lengths for
over 4,500 theaters
times, theater addresses,
ratings and running lengths for
over 4,500 theaters
2009 Lincoln MKS
Lincoln MKS Key Selling Features
Progressive Design
§ New Split Grille (new ‘Lincoln’)
§ New Wheel Line-up (dual finishes, long
spokes, tight radii, great depth)
spokes, tight radii, great depth)
§ Genuine Wood & Metal
§ Sporty Confidence, Daring
§ Next Gen Keypad
Refined, Yet Dynamic American Design
Driver’s Comfort
§ NVH package
§ “Comfort” Seat w/ Lincoln Premium
Leather
Leather
§ Twin Panel Moonroof
§ Heated and Cooled Front Seats
§ BIC Rear Seat Package & Trunk Vol.
§ Capless Fuel Fill
§ Maximize Customer Safety
Business Class Experience
Smooth Power On-Demand
Engaged Drive
§ 3.7L V6 FWD/AWD
§ Responsive Suspension/Tuning
§ 19” Wheels with V-Rated Tires
§ 20” Wheels (late availability)
§ Advance Trac and Tiptronic Shifter
Connected and In Command
Technology at your command
§ Voice Activated NAV
§ Passive Entry/ Passive Start
§ Push Button Start
§ SYNC, Sat. Radio & Premium Branded
Audio
Audio
§ Adaptive Cruise and Adaptive HID
§ Smart Beams & Rain Sen. Wipers
2009 Ford Flex
Flex Key Selling Features
Flex Key Selling Features
§ Bold two-box design with confident stance
§ Signature Ford 3-bar chrome grille
§ Distinctive Character Lines
§ Two-Tone Roof
§ 19” Aluminum Wheels
§ HID headlamps, LED Tail lamps
Dares To Be Different Design
§ Segment Leading 2nd Row Legroom
§ 2nd Row Footrests
§ Optimized 2nd, 3rd row Ingress and Egress
§ Premium Fit and Finish
§ Soft Touch panels and armrests
§ Fold Flat Front Passenger, 2nd, 3rd Row
Seats
Seats
§ Power Liftgate
Unexpected Comfort & Flexibility
§ Refrigeration System (Class Exclusive)
§ Sync (Class Exclusive)
§ EasyFuel, Capless Fuel (Class Exclusive)
§ Ambient Lighting (Class Exclusive)
§ Multi-panel Vista Roof
§ Voice Activated Navigation, Real Time
Traffic and Weather Updates
Traffic and Weather Updates
Leading Technology
§ Standard AdvanceTrac with Roll Stability
Control
Control
§ Standard Side Canopy Air bags
§ Available All Wheel Drive
§ Rear Back Up Camera
Advanced Safety
2009 Ford F-150
Next Generation Navigation
Next Generation Navigation
SYNC
SONY Branded Audio
SONY Branded Audio
Integrated Trailer
Integrated Trailer
Brake Controller
Brake Controller
Increased Stowage
Increased Storage
F-150 All New Interior Lariat
F-150 Key Selling Features
New Content Innovations
§ Fully Flat Rear Cargo Load Floor
§ Heated / Cooled Seats
§ Tailgate Step
§ Power Running Boards
§ Retractable Box Side Step
§ Ambient Lighting
§ 22” Wheels
§ Next Generation Navigation System
§ Premium Branded Audio
§ SYNCTM
§ EasyFuel Capless Re-fueling
§ Trailer Tow Side Mirrors
• Power, Telescope, Folding
§ Rain Lamps
§ Trailer Brake Control
§ Trailer Sway Mitigation
New Content for the Segment
Rear Back-up Camera (View Through
Navigation)
Navigation)
New Content for Ford NA
Explorer America Concept
Explorer America Concept
Explorer America Concept
Explorer America Concept
§ 2.0-liter 4 cylinder engine with
EcoBoost technology
EcoBoost technology
§ 275 hp and 280 lb.-ft of torque
§ Offered with premium 3.5-liter V6 with
about 340 hp
about 340 hp
Powertrain
§ Modern, muscular design language
§ Integrated three-bar grille
§ Defined power dome hood
§ Wrap-around rear glass panel window
§ Sliding rear door
§ Single-touch stackable, sliding seats
§ Work table with seats deploy from the
tailgate
tailgate
§ Three-dimensional compass and
navigation unit built right into the
instrument panel
navigation unit built right into the
instrument panel
Design
§ Ford Explorer America concept is a
new kind of utility with better fuel
efficiency
new kind of utility with better fuel
efficiency
§ Room for six and their gear
§ Moderate towing and off-roading
capabilities
capabilities
Fuel-Saving Utility
EcoBoost
MORE WITH LESS
Better fuel economy? Up to 20%. And more power. Simple fact: Even with
advanced technologies, the majority of vehicles worldwide will be gasoline
powered. That's millions. Ford Motor Company’s new gas-turbo direct-
injection engines can help. Here’s how EcoBoost does more with less:
advanced technologies, the majority of vehicles worldwide will be gasoline
powered. That's millions. Ford Motor Company’s new gas-turbo direct-
injection engines can help. Here’s how EcoBoost does more with less:
UP TO
20 PERCENT FUEL
IMPROVEMENT
UP TO 15 PERCENT
REDUCTION IN CO2
EMISSIONS
IMPROVED
ENGINE
PERFORMANCE
3.5L V-6 Gasoline Turbo-Charged Direct Injection
4.6L V-8
Gasoline Turbo-Charged Direct Injection
Torque Comparison
Torque Comparison
Engine Torque Comparison
Fuel Economy as a Reason To Buy
Near Term Fuel Economy Improvements
Mid-Size Utility
Near Term Fuel Economy Improvements
Mid-Size Utility
150 LBS
Final
EPAS,
BMS, Fast
Engine
Warm-up,
ADFSO,
N/V opt
BMS, Fast
Engine
Warm-up,
ADFSO,
N/V opt
Downsized PT
with
EcoBoost
Technology
with
EcoBoost
Technology
5 to 6 speed
+ASC
+ASC
Aero and
Parasidic
Improvements
Parasidic
Improvements
Ford Verve - B Car Concept
B Car - China
B Car - Europe
Lincoln MKT Concept
Lincoln MKT Concept
Lincoln MKT Concept
Lincoln MKT Concept
§ Distinct Lincoln design and luxury in a
spacious utility vehicle
spacious utility vehicle
§ Signature double-wing chrome grille
§ LED headlamps wrap around the
sculptured hood
sculptured hood
§ Full-width LED taillamps
§ Liquid Bronze Metallic paint
compliments the chrome brightwork
compliments the chrome brightwork
§ Intricate 21-inch, 12-spoke
interlocking chrome aluminum wheels
interlocking chrome aluminum wheels
§ Four executive-sized chairs mirroring
those in first-class aircraft cabins
those in first-class aircraft cabins
§ Patented 3-D interior lighting
technology
technology
Luxurious Utility
§ 3.5-liter V-6 engine with EcoBoost
technology delivers 415 horsepower
and 400 lb.-ft of torque
technology delivers 415 horsepower
and 400 lb.-ft of torque
§ Flex-fuel capable
§ Weight-saving, eco-friendly
“upcycled” materials boost fuel
efficiency
“upcycled” materials boost fuel
efficiency
Powerfully Efficient
§ Upcycled plastics from discarded soft
-drink bottles and other polyester
waste reduce energy consumption
-drink bottles and other polyester
waste reduce energy consumption
§ Plush, hand-knotted rug made from
banana silk
banana silk
§ Chromium-free leather seats
Environmentally Friendly
Risk Factors
Statements included or incorporated by reference herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform
Act of 1995. Forward-looking statements are based on expectations, forecasts and assumptions by our management and involve a number of risks, uncertainties,
and other factors that could cause actual results to differ materially from those stated, including, without limitation:
· Continued decline in market share;
· Continued or increased price competition resulting from industry overcapacity, currency fluctuations or other factors;
· An increase in or acceleration of market shift away from sales of trucks, sport utility vehicles, or other more profitable vehicles, particularly in the United States;
· A significant decline in industry sales, particularly in the United States or Europe, resulting from slowing economic growth, geo-political events or other factors;
· Lower-than-anticipated market acceptance of new or existing products;
· Continued or increased high prices for or reduced availability of fuel;
· Currency or commodity price fluctuations;
· Adverse effects from the bankruptcy or insolvency of, change in ownership or control of, or alliances entered into by a major competitor;
· Economic distress of suppliers that has in the past and may in the future require us to provide financial support or take other measures to ensure supplies of
components or materials;
components or materials;
· Labor or other constraints on our ability to restructure our business;
· Work stoppages at Ford or supplier facilities or other interruptions of supplies;
· Single-source supply of components or materials;
· Substantial pension and postretirement health care and life insurance liabilities impairing our liquidity or financial condition;
· Worse-than-assumed economic and demographic experience for our postretirement benefit plans (e.g., discount rates, investment returns, and health care cost
trends);
trends);
· The discovery of defects in vehicles resulting in delays in new model launches, recall campaigns or increased warranty costs;
· Increased safety, emissions (e.g., CO2), fuel economy, or other (e.g., pension funding) regulation resulting in higher costs, cash expenditures, and/or sales
restrictions;
restrictions;
· Unusual or significant litigation or governmental investigations arising out of alleged defects in our products or otherwise;
· A change in our requirements for parts or materials where we have entered into long-term supply arrangements that commit us to purchase minimum or fixed
quantities of certain parts or materials, or to pay a minimum amount to the seller ("take-or-pay" contracts);
quantities of certain parts or materials, or to pay a minimum amount to the seller ("take-or-pay" contracts);
· Adverse effects on our results from a decrease in or cessation of government incentives;
· Adverse effects on our operations resulting from certain geo-political or other events;
· Substantial negative Automotive operating-related cash flows for the near- to medium-term affecting our ability to meet our obligations, invest in our business or
refinance our debt;
refinance our debt;
· Substantial levels of Automotive indebtedness adversely affecting our financial condition or preventing us from fulfilling our debt obligations (which may grow
because we are able to incur substantially more debt, including additional secured debt);
because we are able to incur substantially more debt, including additional secured debt);
· Inability of Ford Credit to access debt or securitization markets around the world at competitive rates or in sufficient amounts due to additional credit rating
downgrades, market volatility, market disruption or otherwise;
downgrades, market volatility, market disruption or otherwise;
· Higher-than-expected credit losses;
· Increased competition from banks or other financial institutions seeking to increase their share of financing Ford vehicles;
· Changes in interest rates;
· Collection and servicing problems related to finance receivables and net investment in operating leases;
· Lower-than-anticipated residual values or higher-than-expected return volumes for leased vehicles; and
New or increased credit, consumer or data protection or other regulations resulting in higher costs and/or additional financing restrictions.
New or increased credit, consumer or data protection or other regulations resulting in higher costs and/or additional financing restrictions.
We cannot be certain that any expectation, forecast or assumption made by management in preparing forward-looking statements will prove accurate, or that any
projection will be realized. It is to be expected that there may be differences between projected and actual results. Our forward-looking statements speak only as
of the date of their initial issuance, and we do not undertake any obligation to update or revise publicly any forward-looking statement, whether as a result of new
information, future events, or otherwise. For additional discussion of these risks, see "Item 1A. Risk Factors" in our 2006 Form 10-K Report.
SAFE HARBOR