Ford of Europe Realigns Production and Future Sourcing Needs in Response to Economic Crisis

COLOGNE, GERMANY - March 16, 2009 – Ford of Europe today confirmed that, due to the unprecedented decline in the European new car market and the continuing negative economic outlook, it is taking further decisive actions to bring its production capacity in line with significantly decreased industry demand.

In addition, Ford of Europe is realigning its sourcing plans to meet its future business needs, given that demand is unlikely to improve significantly in the European market for some considerable time.

"Cutting capacity, reducing costs and safeguarding our future product plans are essential actions for Ford of Europe to sustain a viable business for the future," said John Fleming, Ford of Europe Chairman and CEO. "We have already taken a number of actions but, as the market has continued to weaken substantially, we are now taking additional necessary actions."

"In relation to today's announcement, we considered all the options but decided the best approach in the present circumstances was to re-balance production across our plants in line with the market decline. We are realigning not only our current production requirements but also our future sourcing plans to meet our business needs."

The actions announced today primarily affect Ford's manufacturing operations in Germany and Spain, and at its new manufacturing facility in Craiova, Romania:

Ford is continuing to review its capacity utilization and manpower needs across Europe.

Ford re-affirmed its commitment to manufacturing in Germany, Spain and Romania.

The Valencia Plant in Spain will move to a two-shift pattern from 1 May. Further discussion is continuing with all parties on how to manage the surplus labour in the short-term. Longer term, two-shift versus three-shift working will depend on market demand.

Current Fiesta production will continue at Valencia, and Ford Focus production will be replaced by production of the next-generation Ford C-MAX.

In addition, from later this year, Valencia will produce a new 2.0-litre version of Ford's EcoBoost petrol engine.

Saarlouis Plant in Germany will continue with its current down-time plan. The current labour level will be reviewed on a regular basis to determine if it is sustainable.

Saarlouis is confirmed as the lead plant for all derivatives of the next-generation Ford Focus. The current Ford Kuga and Ford C-MAX models will not be replaced there when production ends at the plant.

Cologne Engine Plant will share with Ford's Craiova Engine Plant the production of a new, small-displacement EcoBoost advanced petrol engine.

Ford also confirmed it is reviewing the opportunity for a second European source for a derivative of the next-generation Ford Focus, and that this review will be finalised in the near future.

"Ford of Europe must return to sustainable profitability as soon as possible. We will do whatever it takes to ensure the continuing viability of our business, and further actions can be expected," said Mr. Fleming.

"I believe the important actions we have announced today – and which build on previous actions we have taken – will enhance Ford of Europe's ability not only to survive the ongoing current economic crisis, but to emerge from it as a stronger and more competitive business once the economic situation eventually improves."