Ford's Blueprint for Sustainability - Summary

8/9/2019 Ford's Blueprint for Sustainability - Summary

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2009/10

Bluprit for Sustaiability

The Future at WorkSee our full re

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Ala Mulally

President and Chie Executive Ofcer

We are providing aordable uel economy

or millions o customers by introducing

uel-saving technologies across a wide

range o vehicles.

William Clay Ford, Jr.

Executive Chairman

Creating a strong business and building

a better world are not conlicting goals

they are both essential ingredients or

long-term success.

WelcomeMessage rom the Executive Chairman

and President and Chie Executive Oicer

In 2009, Ford Motor Company successfully weathered theworst business environment in generations, posting our first fullyear of positive net income since 2005. Our market share grewin North America, Europe and South America, while sales

increased in the rapidly growing Asia Pacific and Africa region.

These results show that our ONE Ford plan is working: we arebuilding great products, a strong business and a better world.During 2009, we:

Stayedontracktosurpassourproductcarbondioxide(CO2) goal, which calls for a 30 percent reduction in the CO2emissions of our new U.S. and European vehicles by 2020,compared to the 2006 model year.

Introducedtwonewhybridelectricvehiclesandseveralother vehicles that achieve best-in-class fuel economy.

Cutglobalwateruseby16.6percentandimprovedenergy

efficiency in North America by 4.6 percent. Since 2000, wehave cut energy use at our global facilities by 44 percent.

Furtherimprovedvehiclequality,puttingFordonparwithor

better than the best in the business, according to severalglobal third-party assessments.

ReceivedthemostTopSafetyPicksfromtheU.S.-based

Insurance Institute for Highway Safety of any automaker 19 Ford vehicles in total and introduced a range ofsafety innovations.

We are optimistic about Fords future possibilities. This is oneof the most exciting times in our industry since mass automobileproduction began more than a century ago. New technologiesare radically transforming some of the most fundamental andenduring elements of the automobile. The companies that leadthese changes will create new green jobs and generate profitswhile reducing fuel use and CO2 emissions, benefiting both theeconomy and the environment.

As a global community, we have the opportunity to forge acompelling vision to contribute to addressing the issues ofeconomic growth, energy independence and environmentalsustainability. We see two key enablers of progress in theseareas: technologies and innovation will provide the solutions,while collaborative partnerships and a systems approach willhelp us implement them.

Collaboration and innovation are the foundation of our work inareas ranging from vehicle electrification to human rights in oursupply chain. Ford has a proud heritage of improving peopleslives and making their world a better place. We want to build on

this by being recognized as a trusted partner and operatingresponsibly and sustainably wherever we do business. Througha decade of work and a disciplined reinvention of our Company,we have built sustainability into our business model.

Our Company has been through some tough times, but wehave emerged leaner, stronger and more focused. With thesupport of our stakeholders, we are creating an exciting and

viable company poised to deliver profitable growth for all.


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Fusion HybridWeve doubled our hybrid vehicle production, and w

the way to delivering the irst o our pure battery elec

plug-in hybrid vehicles.

Mor about sustaiig Ford

www.ford.com/go/sustaiability

After enduring several of the most difficult yearsin our Companys history, Ford turned a cornerin 2009. In the face of a global economic and

financial crisis, as well as unprecedented eventsin the U.S. automotive industry, Ford posted thefirst full year of positive net income since 2005,and a $17.5 billion improvement over 2008.

Despite the continued economic slump o 2009, which included the

bankruptcies o two domestic competitors and a nearly 40 percent

cumulative drop in new vehicle sales in the U.S. since 2005, we

gained market share in most o our business units across the globe,

including our irst ull-year market share gain in the U.S. since 1995.

Based on Fords improving perormance, the gradually

strengthening economy, and our present assumptions, we nowexpect to deliver solid proits this year with positive Automotive

operating-related cash low.

Our progress in 2009 oers the strongest proo yet that our

business strategy is successul and that we are orging a path

toward proitable growth through teamwork and leveraging global

scale. Three years ago, we created the ONE Ford plan to guide

our business toward better times. We cascaded the plan across

our global organization. And we are executing the plan.

Ford is steadastly ocused on creating a strong business that

builds great products that contribute to a better world. We con

to press orward to globalize vehicle platorms that can be ada

to meet speciic regional needs. Flexible manuacturing capab

allow us to bring products to market with greater speed and

eiciency than ever beore.

We believe that we have been able to weather these last diic

years because our business and our sustainability strategies a

aligned and intertwined. But were ar rom complacent, and w

continuing to address adverse conditions. Notwithstanding ma

positive signs o an economic recovery, the global business

environment remains extraordinarily challenging, with increasin

intense competition rom other automakers.

Our path toward long-term viability began well beore the

recent economic downturn began. We have been undamenta

restructuring our operations in ways that impact every part o o

business. We recognized that our business model needed tochange, and we have been changing it.

One key element o that is our increased ocus on a more bala

portolio that includes more small and midsize vehicles, to resp

to consumer demands. Weve been very clear about our prod

strategy to deliver improved uel economy and reduced greenh

gas emissions through advanced technologies. Our blueprint

sustainability, which highlights how we will meet our product

CO2-reduction goal, has positioned us to lead in the industry.

Oering vehicles with smaller environmental ootprints, tackling

mobility challenges o rapidly growing urban centers, and tailo

our products and services to increasingly diverse global markenot peripheral to Fords uture success they are central to it.

Rad mor oli about:

OurONE Ford plan

Ourplantoreturntoprofitability

Oursalesandmarketsharetrends

Our One Ford pla is achordby four ky prioritis:

Aggressiverestructuring

Acceleratedproductdevelopment

Improvingourbalancesheet

Workingtogether

SuStainingford


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Mor about climatchag ad mobilitywww.ford.com/go/sustaiability

Climate change has the potential to affect allparts of our business and is interconnected toother important issues from water availability

and energy security to human rights andmobility. Ford has developed a comprehensive,science-based global strategy to reducegreenhouse gas emissions and processes whileworking cooperatively with the public and privatesectors to advance climate change solutions.We believe this strategy is one of the factors thathas helped to transform our Companys currentand future products and prospects.

Our Goals

In early 2008, we announced a goal to reduce CO2 emissions rom

our U.S. and European new vehicles by 30 percent by 2020, relative

to a 2006 model year baseline. We also set out a technology

migration plan embodied in our blueprint or sustainability that

details our near-, mid- and long-term product plans to meet this goal

(see graphic opposite). Despite challenging economic conditions, we

are making signiicant progress in implementing the plan and are on

track to surpass the goal. In addition, we have committed that all our

new vehicles will be best in class, or among the best in class, or uel

economy in their segment. During 2009, we expanded our analysis o

potential greenhouse gas emission reductions to include the products

we sell in Brazil and China. In this analysis, we compared our current

product plans to potential reductions aligned with long-term CO2

stabilization at 450 ppm, and considered the impact o low-carbonuels. This is a step toward developing goals or these markets.

Our Progrss

In every region o the world, we are advancing toward our goals by

introducing new products and technologies that signiicantly cut uel

consumption and emissions. For example, during 2009 and early

2010 we:

ReducedCO2 emissions rom our 2009 model year U.S. and

European new vehicles by 12 percent and 6.7 percent,

respectively, compared to the 2006 model year.

ExpandedtheglobaluseofourEcoBoost engines, which

deliver up to 20 percent better uel economy compared to

larger-displacement engines. Our new our-cylinder EcoBoo

engine was introduced in Europe, and we announced plans

use it in China on the Ford Mondeo in 2010. Expandedourlineupofhigh-fuel-efficiency,low-carbon-em

ECOnetic vehicles in Europe, including the second-generatio

Focus and Mondeo. The Focus ECOnetic with stop/start

technology emits just 99 g/km o CO2.

IntroducedtheFigoinIndia,availablewithachoiceoffuel-e

engines, one gasoline and one diesel.

Launchedamorefuel-efficientKainSouthAmericathatfeatu

improved gearing ratios and aerodynamics.

Announcedthelaunchin2010oftheLincolnMKZHybrid,o

ith hybrid oering, which is expected to be the most uel-e

luxury sedan available in North America.

Announcedthatwearedeliveringonour2006pledgetodo

the number o lexible-uel vehicles produced in the United S

by the end o 2010.

CommittedtointroducefivenewelectrifiedvehiclesinEuro

2013, including battery electric, plug-in hybrid and hybrid ele

vehicles that will also be introduced in North America by 201

IntroducedtheTransitConnecttoNorthAmerica,creatinga

class o nimble commercial vans with outstanding uel econ

The Transit Connect will be the basis or Fords irst 21st cen

battery electric vehicle.

AnnouncedabatteryelectricversionoftheFocus,oneofu

10 vehicles based on our new global compact car platorm

is expected to deliver up to 2 million vehicles annually by 20

Ford is actively working to address challenges and opportuniti

posed by widespread use o electric especially plug-in veh

Such a shit could cut greenhouse gas emissions rom vehicle

increase the use o domestic energy sources, decrease pressu

on petroleum stocks and reduce urban air pollution. But it will

Ford FiestaWe introduced our new Fiesta global small car in Europe in 2008

and in China in 2009. When it launches in the United States in 2010,

it is expected to have best-in-class uel economy in its segment.

We are on track to surpass our goal of a 30 percent reductio

in CO2 emissions from our U.S. and European new vehicles

by 2020, relative to a 2006 model year baseline.

climatechange and

mobility


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requireunprecedentedlevelsofcollaborationandpartnership

between automakers, government oicials, utilities, transportation

providers and inormation technology companies.

A wide range o stakeholders will need to work together to developcharging inrastructure, integrate electric vehicles with electric

utilities, and knit vehicles and grids together into an eicient system.

During 2009 and early 2010 we:

Workedwithacoalitionof10utilities,theU.S.Departmentof

Energy,theNewYorkStateEnergyResearchandDevelopment

Administration,andtheElectricPowerResearchInstitutetotest

a leet o Ford-provided plug-in hybrid vehicles.

AnnouncedacollaborationwithMicrosoft on new energy

management sotware that will help owners o plug-in electric

vehicles determine when and how to recharge their vehicles,

while giving utilities better tools or managing the expected

changes in energy demand.

Catalyzedandconducteddialogueswithkeystakeholdersin

several U.S. cities to explore sustainable mobility projects that

incorporate electric vehicles and inrastructure.

Workedonotherimportantissuesrangingfromstandards

development to battery recycling.

Were also making progress in understanding and reducing our

climate ootprint across our value chain. We reduced 2009

operational CO2 emissions by 9 percent globally compared to 2008

and earned our ith consecutive Energy Star Award or Sustained

Excellence rom the U.S. Environmental Protection Agency. In

addition, we announced our participation in the Carbon Disclosure

ProjectsSupplyChainInitiativeandtheWorldResourcesInstitute/

World Business Council or Sustainable Developments Scope

road testing projects both as a way to better understand

greenhouse gas emissions in our supply chain. Ford is the only

automaker participating in these two initiatives.

Climat Chag Policy

We are committed to advocating or eective and appropriate

climate change policy in the United States and around the wo

We are an active member o the U.S. Climate Action Partnersh

(USCAP), a coalition o diverse stakeholders that has released

consensus recommendations or U.S. climate protection legis

The recommendations represent a balanced and integrated

approach to key linked issues that must be addressed in any

national climate legislation; however, we recognize that the

recommendations are not the only possible path orward. Our

product goal is aligned with the USCAP recommendations and

the broad goal o climate stabilization. The goal also aligns our

product plans to meet or exceed recently announced uel eco

requirementsintheUnitedStatesandEurope.

Mobility

Most automakers deinesustainable mobilityas reducing the

environmental impacts o the vehicles they oer by cutting the

vehicles liecycle greenhouse gases and other emissions.

As indicated by the previous discussion, we see this as an imp

piece o the picture and were working hard to achieve it.

But there are other important pieces as well. By 2050, there w

nine billion people on Earth, 75 percent o whom will live in urb

areas. Putting nine billion people into private automobiles is ne

practical nor desirable.

At Ford, our goal is to make mobility aordable in every sense

the word economically, environmentally and socially. We belie

that creative collaboration and innovative technologies and se

that integrate diverse public and private modes o travel can

harness the beneits o mobility while reducing its environment

and social impacts. By concentrating on providing aordable

transportation throughout the world and applying emerging

inormation technologies, we believe Ford can contribute to

addressing signiicant mobility challenges. For several years, F

has engaged with stakeholders including municipal and stat

government oicials, utilities, transportation planners and NGO

to envision mobility solutions and pursue their implementation

Rad mor oli about:

Fordsclimatechangerisks

and opportunities

Ourblueprintforsustainability

Climatechangepublicpolicy

Electricvehicles

Newmobility

neAR TeRMBegin migration to advanced technology

Signifcant number o vehicles withEcoBoost engines

Electric power steering

Dual clutch and six-speed transmissionsreplace our- and fve-speeds

Flexible-uel vehicles

Additional hybrid applications

Increased unibody applications

Introduction o additional small vehicles

Battery management systems

Aerodynamics improvements

Stop/start systems (micro hybrids)

CNG/LPGprepenginesavailablein select markets

MID TeRM

Full implementation o known technology

EcoBoost engines available in nearly all vehicles

Electric power steering high volume

Six-speed transmissions high volume

Weight reduction o 250750 lbs.

Engine displacement reduction acilitatedby weight reductions

Additional aerodynamics improvements

Increased use o hybrids

Introduction o battery electric and plug-inhybrid vehicles

Vehicle capability to ully leverage availablerenewable uels

Diesel use as market demands

Increased application o stop/start

LOnG TeRMContinue leverage o hybrid technologies deployment o alternative energy sources

Increased percentage o internal combustioengines using renewable uels

Volume expansion o hybrid technologies

Continued leverage o plug-in hybrid andbattery electric vehicles

Introduction o uel cell vehicles

Clean electric/hydrogen uels

Continued weight reduction throughuse o advanced materials

2007 2011 2020 2


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2010 Ford TaurusThe 2010 Ford Taurus is one o the saest-rated large sedans

sold in America. It received ive-star NCAP crash ratings or

rontal and side impact and good IIHS ratings in oset rontal

impact, side impact, roo strength and rear impact evaluations.

Mor about vhicl safty


Vehicle safety is one of four principles thatinform and guide Fords every design andengineering effort,1 and we continually work to

raise the bar on safety. Based on the followingindependent measures, Ford remains anindustry leader in motor vehicle safety.

FordholdsthemostTopSafetyPicks(awardedbytheInsurance

Institute or Highway Saety, or IIHS) o any vehicle manuacturer.

Nineteen Ford vehicles earned this honor in 2009.

Forthe2010modelyear,23Fordvehiclesreceivedfive-star

ratings or both rontal impact and side impact rom the National

Highway Traic Saety Administration (NHTSA) in its U.S. New

Car Assessment Program (NCAP) ratings.

InFordsmostrecentEuroNCAPassessments,theFordKuga

and Ford Fiesta achieved Fords irst three-star ratings orpedestrian protection. These cars also joined the Focus, Mondeo,

S-MAX and Galaxy in having best-in-class, ive-star adult

protection and our-star child protection ratings.

Prvtig Distractd Drivig

Recently,distracteddrivinghasreceivedsignificantpublicattention

as a contributing actor in motor vehicle crashes. Ford has been

conducting research on distracted driving or many years, and

weve recently taken a number o important actions to address it.

In 2009, Ford was the irst vehicle manuacturer to support the

SchumerbillintheU.S.Senate,whichwouldrequirestatestoban

handheld texting while driving. Ford also clariied its employee

policies to explicitly ban the practice.

Fords voice-activated SYNC technology, irst unveiled in 2007,

encourages drivers to use voice controls with hand-held devices

as cell phones and MP3 players, enabling them to keep their eye

the road and hands on the wheel. For example, when a text mes

arrives to a drivers cell phone, SYNC can read it aloud through

text-to-speech technology and then provide a list o canned repl

the driver to select rather than key-in manually. Also, SYNC locks

certain eatures (such as adding or editing a phone book contact

whiledriving.FordsinnovativeMyKeytechnologyalsohelpsp

encouragetheirteenagerstodrivemoresafely.MyKeyallowsow

to program a key that can, or example, limit the vehicles top sp

to 80 mph and mute the audio system until the saety belt is buc

Finally,ourFordDrivingSkillsforLife(FDSFL)programinclude

instruction(bothontheFDSFLWebsiteandatride-and-drive

or teen drivers) on the importance o avoiding distracted drivin

In2009,FDSFLactivitieswerecarriedoutinnineU.S.states,

the programs reach was expanded in the Asia Paciic region,

roughly 11,000 drivers were trained. Operation Teen Sae Driv

a joint eort between Ford and the state o Illinois that is mod

onFDSFLhascontributedtorealresults:thestatehasseen

49 percent reduction in teen atalities in the three years since t

program was launched.

Supportig Collaborativ Rsarch

On the research side, Ford is a leader in eorts to assess and

the eectiveness o active saety technologies. In January 201

consortiumof29partnersledbytheFordEuropeanResear

Center in Germany joined orces in the Accident Avoidance b

Active Intervention o Intelligent Vehicles (interactIVe) project. T

consortium seeks to support the development and implement

o active saety systems, and includes seven automakers, six

suppliers and 14 research institutes.

In 2010, Ford is bringing to market

worlds first automotive inflatable s

belts, combining traditional seat be

and air bag technologies to help redhead, neck and chest injuries for re

seat passengers.

Rad mor oli about:

Managingvehiclesafety

Accidentavoidanceandoccupant

protection technologies

Researchondistracteddriving

1Theotherprinciplesarequality,fuelefficiencyandsmarttechnologies.

vehicleSafety


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Engagement with Key Suppliers Corporate Managemen

Ford is working with its strategic production suppliers at the

corporate level to enhance their policies, veriication system

and ability to inluence their own supply chains. Our 90 Align

Business Framework suppliers commit to manage and assuproper working and environmental conditions in their acilitie

supply chains, and we are measuring their progress in doing

Collaboration within the Automotive Industry: Ford is driv

collaboration between automakers and supply chain compa

on global working conditions issues through the AIAG.

Through these eorts, we have learned the importance o help

to build the capability o suppliers to manage working conditio

rather than simply assessing their compliance with Ford and le

requirements(thoughassessmentscontinuetoprovideimpor

learnings). We continue to see signiicant potential or collabor

action by automakers to establish a common, eective and e

approach to ensuring sound working conditions in the automo

supply chain.

Beyond our own industry, we are working with government lea

to explore how to encourage multinational companies to act a

positive orce in protecting human rights in global trade, both

through work in their own supply chains and through advocac

More than 180,000 of our suppliers workers have been trained

in human rights based on Ford and joint automaker supplier

outreach programs.

Mor about huma rights


Today, Fords Code of Basic Working Conditions (CBWC), adoptedin 2003, applies throughout our global operations and our $65 billionsupplychain.Werequireoursupplierstoensurethatourproducts

no matter where they are made are manufactured under conditionsthat demonstrate respect for the people who make them. We are asignatory to the United Nations Global Compact and activelyparticipatebyinvitationintheHumanRightsandSupplyChain

Sustainability Advisory Groups convened by the Global Compact.

We aim to leverage Fords global supply chain to make a

positive impact in the markets in which we do business, using

a three-pronged approach:

Engagement with Individual Supplier Facilities: Training

and capability building orm the basis o Fords supply chainworking conditions program, supported by assessments o

individual actories (totaling more than 600 to date). Through

Ford-administered programs and those conducted in conjunction

with other automakers and the Automotive Industry Action Group

(AIAG), we have trained 1,773 managers rom 1,478 supplier

companies on systemic solutions to working conditions challenges.

Trainingparticipantsarerequired,inturn,tocascadethetraining

to their own management and employees as well as to clearly

communicate expectations to their suppliers, thereby expanding

the impact signiicantly.

Ten years ago, stakeholders challenged Ford totake a leadership role in addressing human rightsissues in the automotive industry by developing

systems and programs to ensure sound workingconditions in Ford facilities and our supply chain.We recognized compelling business reasons totake up the cause: we believe that people aremost likely to excel in an environment that aimsfor excellence. We also understand the positiveimpact our actions can have on our 176,000employees and the million people who workfor companies in our supply chain.

In early 2010, Corporate Responsibility Officermagazine rank

Fords human rights efforts first among companies included i

its 100 Best Corporate Citizens list. Ford was also deemed on

the Worlds Most Ethical Companies by the Ethisphere Institut

Ford was the only automaker to receive either recognition.

Rad mor oli about:

FordsCodeofBasicWorking

Conditions

Oursupplychainprofile

Oursupplychainworkingconditions

training and assessment status

humanrightS


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Performance Overview

We defnesustainabilityas a business model that creates

value consistent with the long-term preservation and

enhancement o environmental, social and fnancial capital.

Below are some key indicators o our perormance

in these areas. See the ull data set and notes at

www.ford.com/go/sustaiability.

Cotact

Preparing this summary oers a valuableopportunity or us to assess and improveupon our progress and perormance. Tocontinue to do so, we need your eedback:

Thomas A. nima

Ford Motor Compay

O Amrica Road

Darbor, MI 48126, U

[email protected]

For additioal ots to accompay this data go to th full rportwww.ford.com/go/sustaiability

FORD DATA 2009/10

eCOnOMY/QUALITY 2007 2008

Global Quality Research System things gone wrong (three months in service), total things gone wrong per 1,000 vehicles 1,405 1,206

Global Quality Research System customer satisaction (three months in service), percent satised 76 77

Sales satisaction with dealer/retailer, Ford brand, U.S., net promoter score 82 84

Sales satisaction with dealer/retailer, Ford brand, Europe, net promoter score 80 81

Service satisaction with dealer/retailer, Ford brand, U.S., net promoter score 72 74

Service satisaction with dealer/retailer, Ford brand, Europe, net promoter score 68 70

Shareholder return Bloomberg total return analysis, percent -10 -66

Net income/loss, $ billion -2.7 -14.7

Sales and revenue, $ billion 172.5 146.3

enVIROnMenT 2007 2008

Ford U.S. feet uel economy, combined car and truck, miles per gallon (higher mpg refects improvement) 25.3 26.0

Ford U.S. feet CO2 emissions, combined car and truck, grams per mile (lower grams per mile refects improvement) 352 340Ford Europe feet CO2 emissions, grams per kilometer (based on production data or European markets)

Ford 149 146

Volvo 190 182

Worldwide acility energy consumption, trillion BTUs 65.6 61.0

Worldwide acility energy consumption per vehicle, million BTUs 10.8 12.2

Worldwide acility CO2 emissions, million metric tons 6.1 5.4

Worldwide acility CO2 emissions per vehicle, metric tons 1.02 1.09

North American Energy Eciency Index, percent (2000 base = 100 percent) ( lower percentage refects improvement) 74.4 69.9

SOCIeTY 2007 2008

Employee satisaction, Pulse survey, overall, percent satised 64 66

Overall dealer attitude, Ford, relative ranking on a scale o 1100 percent (summer/winter score) 69/64 68/69

Overall dealer attitude, Lincoln Mercury, relative ranking on a scale o 1100 percent (summer/winter score) 66/64 64/66

Ford Motor Company Fund contributions, $ million 37 33

Corporate contributions, $ million 17 16

Volunteer corps, thousand volunteer hours 86 100

Lost-time case rate (per 100 employees), Ford Motor Company 0.9 0.7

Lost-time case rate by region (per 100 employees), Ford Motor Company

Americas 1.2 1.0

Asia Pacic and Arica 0.1 0.1 0

Europe 0.7 0.6

U.S. saety recalls, number per calendar year (including legacy vehicles on the road or 10+ years) 15 10

U.S. units recalled, number o million units (including legacy vehicles on the road or 10+ years) 5.5 1.6

IIHS Top Saety Picks, number o vehicles 6 14

1Allbut12,000ofthe4.5millionvehiclesrecalledareoldermodels(19922003)thatwereequippedwithfaultyTexasInstrumentsspeedcontroldeactivationswitches.Althoughthedatashowsthema

ofthevehiclesequippedwiththeseswitchesdonotposeasignificantsafetyrisk,werecalledthemtoreassurecustomersandeliminateanyfutureconcerns.

Ford's Blueprint for Sustainability - Summary

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