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FORD CALLS FOR ACTIVE PARTNERSHIP WITH GOVERNMENT

Challenges oil companies and government to increase retail distribution infrastructure for ethanol.

Urges Congress to make research and development tax credit permanent.
Calls for an even playing field in foreign markets by ending non-tariff trade barriers and currency distortion.

Ford's Way Forward turnaround plan on track with steady sales increases for new fuel efficient cars and poised to return North American automotive operations to profitability in 2008.

WASHINGTON, June 14, 2006 – In a speech at the U.S. Chamber of Commerce today, Ford Motor Company Executive Vice President and President of the Americas Mark Fields addressed the ways the automaker has aggressively restructured the company and its culture, and outlined policy areas such as trade, currency, energy, health care and investment in research and development that call for partnerships between industry and government.

"What are we asking from our partners in government and industry? We are not asking for anybody to help us alone or help us uniquely. No bailouts. No handouts," Fields said. "But – having taken the steps to help ourselves – we think it’s important that we all come together to address the external challenges that affect so many American businesses."

In describing the crucial role innovation is playing in Ford’s turnaround plan, Fields pointed out that the company spends $7.5 billion every year on research and development. "That’s nearly as much as NASA and more than the Department of Agriculture, Interior, Labor, Justice, Commerce, Transportation, EPA, Education and Homeland Security combined," Fields said. "We can’t cut our way to growth. We have to innovate."

Fields emphasized the need for production of alternative fuels like ethanol, and the infrastructure to support them. In the face of rising fuel costs, taking steps towards energy independence is more important than ever and Ford is committed to doing is part because, Fields said, “It's what our President has called for, it's what the Congress has been working on, and more importantly, it's good for America.” Ford has put more than 1.6 million ethanol-capable, or flex-fuel, vehicles on the road in the last decade.

In addition, Fields outlined several policy areas that he considers crucial to the future viability of the U.S. auto industry:

He urged Congress to consider a permanent research and development tax credit in order to provide businesses with incentive to continue to invest in innovation through the highs and the lows of the business cycle.
He called for cooperation between business and government to address skyrocketing health care costs.

Noting that foreign governments are using non-tariff trade barriers and currency distortion to keep U.S. automakers out of their markets, Fields called on government to ensure a level playing field.

With Ford working to make existing conventional engines more efficient and investing in engines that run on new sources of energy, like battery power, ethanol and other biofuels, he called on oil companies and the government to do much more to increase retail distribution of ethanol through incentives like tax credits.

Turning to the domestic economy, Fields pointed out that not all cars are created equal in terms of their economic benefits to American society. While foreign automakers own about 40 percent of the US market, they only employ about 20 percent of the workers.

“So, despite all their claims about being “American,” most of the cars and trucks the foreign automakers sell in America aren’t actually made in America. What's more, most of the design and engineering jobs are not located in America. And the profits from the sales of those foreign cars are largely not spent in America," he explained. Fields, who was based in Japan from 2000-2002 as President and CEO of Mazda, led the company through a period of significant transformation.

"Ford Motor Company does not support a protectionist trade policy – and we never have, Fields said. "The qualifier to 'free trade' is 'fair trade.' If foreign governments, like Japan and Korea, use non-tariff trade barriers to keep us out of their markets – well, there’s nothing free or fair about that. Competing fairly means allowing the market to set the rates of currencies against one another – not governments."

Commenting on currency manipulation, he noted that between 2000 and 2004, the Japanese government spent more than $400 billion to keep the yen weak. "We can compete with Toyota, or Honda, or Nissan -- but we can’t compete with the government of Japan," he said.

Fields also provided an update Ford’s turnaround plan, the Way Forward, which was launched in January. He noted that Ford has slowed its decline in market-share and is on pace to convert three quarters of its North American assembly plants to flexible manufacturing by 2008. This will enable Ford to switch between models and deliver more products faster based on changing demand.

“We allowed ourselves to get bogged down in the accumulated decisions and systems of the past, getting stuck in old ways of thinking,” Fields said. “Even when we had successes, like with our SUVs, we grew so dependent upon that success that we didn’t look far enough beyond the horizon, tracking the trends, knowing our customers, and seeing the day when they might want something else. I’m proud to tell you, that’s the Ford of the past—not the Ford of today.”

Fields concluded his remarks with a look ahead. "In a town that loves to hate 'special interests,' I want to be clear that doing this is very much in the national interest," he said. "Sometimes finding the right balance, or charting a challenging new course forward, can be uncomfortable. But, with the right partnership between business and government, and smart decisions on our part, I know we can succeed.”

Mark Fields is a Ford executive vice president and president of The Americas, a position he assumed in October 2005. In this role, Fields is responsible for all operations involved in the development, manufacturing, marketing and sales of Ford, Mercury and Lincoln vehicles in the United States, Canada, Mexico and South America.

Formerly, he served as executive vice president, Ford of Europe and Premier Automotive Group (PAG), where he led all activities for Ford's premium vehicle business group, and for Ford-brand vehicles manufactured and sold in European countries. Prior to that, Fields was chairman and chief executive officer of PAG. Fields joined Ford Motor Company in 1989. From 2000-2002, he was President and CEO of Mazda Motor Company, leading the company through a period of significant transformation. He previously held a number of positions in both South and North America, including Managing Director of Ford Argentina.

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