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Ford Announces Intention to Develop New Incentive Plan

13 October 1998

Ford Announces Intention to Develop New Incentive Plan For Salaried Employees in the U.S. and Canada

    DEARBORN, Mich., Oct. 12 --  Ford Motor Company
today announced to its 50,000 profit-sharing eligible salaried employees in
the U.S. and Canada an initiative to develop a new performance-based incentive
compensation plan.
    The new plan, which would also extend to employees of Ford Credit and
Visteon Automotive Systems, would be substantially profit- and sales-driven,
but the final size of awards would be determined by how well the company
performs against specific corporate targets.  Possible measures could include
quality and customer satisfaction.  The proposed changes will be reviewed with
employee focus groups between now and the end of 1998.  The details will then
be finalized and the program implemented for calendar year 1999, if approved
by the Board of Directors.
    "The Ford team has accomplished much in the last several years.  Sales are
strong, quality is the best it has ever been and our total costs have marched
steadily lower.  All of this has helped build real value for customers and
shareholders," said Alex Trotman, chairman and CEO.  "We are embracing
incentive-based compensation plans to build on our strengths, and drive for
continued improvement in the areas customers and shareholders tell us are most
important to them."
    With this initiative, and the new Annual Incentive Compensation Plan
covering Ford's top 5,000 salaried employees (approved by shareholders in May
1998), substantially all salaried Ford employees in the U.S. and Canada will
participate in performance-driven incentive compensation plans in 1999.
    Under the Annual Incentive Compensation Plan, the size of bonus payments
can be adjusted up or down depending on profits and how well Ford performs
against certain "business structure" targets set by the Compensation and
Option Committee of the Board of Directors.  For 1998, targets were set for
quality, customer satisfaction, the return on equity of Ford Credit and the
after-tax return on sales of Ford Automotive Operations, including Visteon.
    Profit sharing plans for hourly employees would be unaffected.