Connecting Ford People

September 2008

Going global

Feel the difference

08

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12

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0� Upfront Second Quarter resultsFiesta Job 1Industry News

08 Cover StoryIntroducing the all-new Fiesta, Ford Motor Company’s first truly global car

John FlemingPresident and CEO, Ford of Europe

Ford NewsIncluded with this issue between pages 10 and 11

We are now nearing the end of the third

quarter and focussed on delivering our

profi t commitments in a fast-changing

and challenging business environment.

We had an impressive fi rst half but

we are now in a different phase in our

business growth and are starting

to see the effects of the economic

uncertainties come through in new car sales. This downturn

is affecting our key markets and year-over-year sales are

starting to dip.

For the forseeable future we have the considerable

advantage of our great new products and the benefi t of the

effi ciencies achieved through all of our hard work in the past.

But we are still in a high-volume, low margin business, and

as the volume disappears it is very diffi cult to make money

and our break-even point is still too high.

Until recently we have been able to rely on increasing revenue

to improve our profi tability but we are now in a period which

will really test our leadership and teamwork.

We need a laser focus on our cost as a way of working to

offset the revenue loss resulting from our lower sales.

As part of our strategy for facing up to the strengthening

challenges we are managing our expenditure to preserve

cash. We have set ourselves a signifi cant cash saving objective

which requires the elimination of all spending that is not

essential to the wellbeing of our business and its future.

It will be diffi cult but we will come through it and emerge

stronger as a result. Thank you for your contribution, your

hard work and your commitment.

Staying strong in a challenging environment

September 2008

Connecting Ford People

12 InterviewPaul Thomas discusses all-new Fiesta’s innovative Marketing campaign

1� FeatureLooking at the trends shaping the world in which we live

17 SportFord Motorsport news round-up

18 FeatureONE Ford helps employees deliver business goals globally

1� DiversityCelebrating the success of the Henry Ford Scholarship programme

Upfront

� | September 2008

Q2 figures reveal mixed financial resultsFord Motor Company reported a second quarter net loss of $8.7 billion, including special items (mostly reduced asset values) totalling $8bn. This compares with a net profit of $750 million in the second quarter of 2007.

Ford of Europe’s second quarter pre-tax profits were $582m, up from $262m a year ago. Revenue was $11.5bn, up from $9.2bn. In total, costs decreased by about $100m.

Commenting on these figures, John Fleming, Ford of Europe’s president and CEO, said: “Our results were outstanding but we have already entered a new phase. There is no doubt that market pressures, together with continuing commodity price inflation, will constrain our earnings growth in the second half of this year. We are well positioned to weather the downturn

but, more than ever, we must keep our focus on the essentials of our business: product, cost and delivery.”

Other Q2 highlights: • Ford worldwide automotive operations

reported a pre-tax loss of $670m, compared with a pre-tax profit of $378m a year ago.

• Ford North America Automotive operations reported a pre-tax loss of $1.3 billion, com-pared with a loss of $270 million a year ago.

• Ford South America posted a pre-tax profit of $388 million, up from $255 million a year ago.

• Volvo reported a pre-tax loss of $120m, compared with a loss of $91m a year ago.

• Ford Asia Pacific Africa reported a pre-tax

profit of $50 million, compared with a pre-tax profit of $26 million a year ago.

• Ford earned $103 million from its investment in Mazda in the second quarter, compared with $72 million a year ago.

• Other automotive operations, which consists primarily of interest and financing-related costs, reported a second quarter pre-tax loss of $336 million.

• The Financial Services sector posted a pre-tax loss of $334 million, compared with a pre-tax profit of $105 million a year ago. Ford Credit reported a pre-tax loss of $294 million, compared with a profit of $112 million a year ago.

Ford’s Cologne plant celebrated the official Job 1 of all-new Fiesta on

August 14. At the ceremony were Dr. Jürgen Rüttgers, Minister-President of

North-Rhine Westphalia, Jim Tetreault, VP, Manufacturing, Ford of Europe,

and Ford of Germany chairman Bernhard Mattes.

As of early 2009 the Fiesta will also be produced at Ford’s plant in Valencia,

Spain. Production facilities outside of Europe will be Nanjing (China), Rayong

(Thailand) and Cuautitlan (Mexico).

Fiesta production begins

Ford of Europe is to establish a dedicated National Sales Company (NSC) in Romania which will take full responsibility for the marketing and service of Ford vehicles there from August 2010. Based in Bucharest, the organisation will be headed by Vladimir Vosicky, formerly managing director of Ford in the Czech Republic.Currently, Ford vehicles and parts are imported and distributed by local importer Romcar.The establishment of an NSC in Romania is the next logical step for the Company following an increase in sales in recent years and the purchase of the Craiova vehicle manufacturing plant.

Ford to establish NSC in Romania

September 2008 | �

The Ford Ka is to star in the next James Bond movie, Quantum of Solace. The Ka, painted a unique metallic gold, is driven by the film’s beautiful but feisty leading lady, Olga Kurylenko, who plays Camille, a woman who becomes an unlikely ally for Bond. In preparation for the scene a team of three sound engineers spent a day at the acoustic laboratory at Aachen University recording engine and exhaust noises.The film opens in the UK and France on October 31, then across the rest of Europe during November.

New Ka to star in 007 movie

The Ford Focus 1.6 TDCi Style has been named Green Car of the Year in the UK’s What Car? Green Car Awards. The Awards rate vehicles not only on CO2 output but also other pollutants, running costs, safety, security, practicality and

Focus named Green Car of the Year

Ford Motor Company is to significantly accelerate its North America transformation plan with the addition of several new fuel-efficient small vehicles. It will also realign its North American manufacturing.

In addition to bringing six small vehicles to North America from its European line-up, Ford is accelerating the introduction of fuel-efficient EcoBoost and all-new four-cylinder engines, boosting hybrid production and converting three existing truck and SUV plants for small car production, beginning this December.

“We are accelerating the development of the new products customers want and value,” said Alan Mulally, president and CEO. “We sell some of the best vehicles in the world in our profitable European and Asian operations and we will bring many of them to North America on top of our already aggressive product plans.”

The first EcoBoost engine applications will arrive in 2009. EcoBoost uses petrol turbocharged direct-injection technology for up to 20 % better fuel economy, up to 15 % fewer CO2 emissions and superior driving performance versus larger-displacement engines. Ford also plans to double capacity for North American four-cylinder engines to more than one million units by 2011.

Ford Motor Company accelerates transformation

driving quality. Focus topped its category before going on to take the overall prize ahead of the seven other category winners, including the Fiat 500 and Citroen C5.

1. Citroën C4 Picasso 2. Renault Megane 5. Ford C-MAX

1. VW Passat 2. Ford Mondeo 3. Skoda Octavia 9. Ford S-MAX

1. Ford Galaxy 2. Renault Espace 3. VW Sharan

1. Ford Transit 2. VW Transporter 3. Fiat Ducato

1. Fiat Panda 2. Fiat 500 (2007) 10. Ford Ka

1. Peugeot 207 2. GM Corsa 4. Ford Fiesta

1. GM Meriva 2. Renault Modus 4. Ford Fusion

1. VW Golf 2. Ford Focus 3. GM Astra

Upfront

6 | September 2008

Ford market share July 2008

total vehicles by country (+/– 2007)

Segment shares total Europe

January–May 2008

A - AustriaB - BelgiumCH - SwitzerlandCZ - Czech RepublicD - GermanyDK - DenmarkE - SpainF - FranceFIN - FinlandGB - Great BritainGR - GreeceH - HungaryI - ItalyIRL - IrelandN - NorwayNL - NetherlandsP - PortugalPL - PolandS - SwedenRUS - RussiaTR - Turkey

TOTAL EUROPE

7.5% (+0.7%) 7.3% (+0.7%) 5.6% (+0.7%) 7.8% (–1.4%) 7.1% (+0.4%) 7.4% (–1.8%) 7.4% (–2.0%) 5.6% (–0.1%) 7.2% (–1.1%) 17.8% (+2.9%) 6.4% (–1.1%) 9.7% (–1.4%) 7.4% (–0.5%) 13.1% (–1.7%) 10.5% (+1.6%) 7.6% (–0.1%) 6.6% (–0.8%) 7.0% (–0.4%) 7.0% (+1.0%) 5.6% (–0.9%) 14.0% (–4.0%)

8.02% (–0.5%)

1. Citroën C4 Picasso 1. Citroën C4 Picasso 2. Renault Megane 2. Renault Megane 5. Ford C-MAX 5. Ford C-MAX 5. Ford C-MAX 5. Ford C-MAX

1. VW Passat 1. VW Passat2. Ford Mondeo

3. Skoda Octavia 3. Skoda Octavia 9. Ford S-MAX 9. Ford S-MAX

1. Ford Galaxy 2. Renault Espace3. VW Sharan

1. Ford Transit 1. Ford Transit 2. VW Transporter 2. VW Transporter 3. Fiat Ducato 3. Fiat Ducato

15.6% 11.8% 3.9%

13.4% 11.4% 9.9%

23.3% 14.9% 13.4%

15.8% 13.4% 12.6%

17.9% 16.0% 9.9%

19.2% 13.4% 13.1% 4.5%

21.6% 17.6% 10.8%

12.2% 10.3% 7.7%

VW takes wraps off new GolfVolkswagen has revealed the first official details of its sixth generation Golf. The Focus competitor’s basic outline is little changed but there are substantial revisions to the chassis and suspension. The company also promises improved quality with better soundproofing and re-shaped door mirrors to reduce engine and wind noise.

The engine line-up will include 1.4-litre petrol and diesel units, plus an economical three-cylinder 1.2-litre and a 240PS 2.0-litre TFSI for the GTI. The new Golf will debut at the Paris Motor Show with sales to start in the autumn.

Andrea Pininfarina diesAndrea Pininfarina, chairman and CEO of Italian car design firm Pininfarina SpA, has died in a road accident. Pininfarina, 51, who took over as CEO in 2001, was riding a Vespa scooter which was involved in a collision with a car near the northern Italian city of Turin.

Pininfarina, 51, was the third generation to run Pininfarina SpA, founded in 1930 by his grandfather Battista ‘Pinin’ Farina — who combined his nickname and last name to create the company’s name and new family name.

The Ford Focus Coupé-Cabriolet is currently produced by Pininfarina at its Turin facility. The company, renowned for its expertise in producing niche vehicles, was also responsible for the Streetka.

Mazda to lose weightMazda has announced plans to cut fuel consumption across its range by 30% by 2015. This will be achieved partly through the use of direct-injection engines and stop-start technology but Mazda also hopes to reduce the weight of each of its vehicles by at least 100kg by moving each model to a new platform. The new platforms will also allow engineers to reduce suspension components and use thinner materials on door panels and the bonnet, as well as using ultra-high-tensile steel for the body construction.

10 980 911 (+242 813) 2 107 542 (+14 377)

267 685139 520126 091116 34093 328

September 2008 | 7

While total industry sales in the main 19 European markets were weaker overall in July, compared with a year ago, our market share held steady.

With consumers focussed on holi-days, July is traditionally one of the weakest months for vehicle sales. This year, with the added influence of the general economic slowdown in some markets, total sales decreased 7.5 % to 1,406,125.

In July, we achieved sales of 117,210 for a share of 8.4 %, the same as last year. With year-to-date sales of approximately 940,630, we did better than the 2.4 % overall market decline.

Adding sales from Turkey and Russia, which continued to be strong, our July total was 141,170 units. Our year-to-date sales in those EU21 markets increased by approximately 7,000 units, to 1,143,240, a solid performance.

Our European Direct Markets were also buoyant in July, increasing more than 85 % to 8,650. That strong performance took the total for all of our 51 markets to 149,820 in July and 1,196,240 year-to-date, an increase of over 23,400.

Britain remained our largest sin-gle market in July, boosting sales by 4.3 % to 32,170. Market share was up almost 3 %, at 17.8 %. Year-to-date, Britain sold 267,685 units for a market leading share of 16.4 %.Germany also moved forward in

July, increasing sales by 8.8 % to more than 21,000 units, and improv-ing its share to 7.1 %. In the year through July, our German team sold 139,520 vehicles, 8,230 more than in the same period of 2007.

A government environmental incentive continued to drive sales in France and we continued to make the most of the opportunity, increas-ing both our sales volume (to 10,870) and share (to 5.6 %) in July. Year-to-date, our sales were up 12.8 %, at 91,795.

In Italy, we remained the leading imported brand.

In Russia, our sales soared almost 26 % to 19,050. For the first seven months as a whole our sales were up some 20,000 units, to 116,340.

Among other July increases, our sales in Belgium rose by 10 % to 3,585, and in the Czech Republic we climbed almost 53 % to 1,535.

Our top selling model in July was Focus, selling over 42,000 units, but the star performers were the Mondeo and the new Kuga. Mondeo continued to show its appeal with sales rising 12.8 % to 14,960, while the Kuga clocked up 3,625 in its first month on sale.

Among our commercial vehicles, the Transit gained sales of 16,185 and the Transit Connect 6,315.

While the general economic envi-ronment continues to be tough in some key markets, our performance

shows that we have the products to compete strongly. That strength will further increase from October, when our all-new Fiesta goes on sale.

Our colleagues in FCSD are also focussed on growth, profitability and customer loyalty. FCSD is a wide-ranging business with activities including parts sales and supply, service engineering operations (pro-viding, for example, repair methods and training to the dealers) and vehi-cle personalisation. Additionally, it is focussed on improving customer satisfaction.

In July, sales came in at 106.5 % versus prior year. The strongest market in July was Hungary: 135 % versus prior year.

Year-to-date sales performance across all business units (VP Pro-duction Channel, Accessories, Mechanical and Collision) was 104.9 % versus prior year. Vehicle Personalisation Production Channel fitment achieved significant growth: 36 % versus prior year.

The number of vehicles personal-ised through on-line fitment was 673,311 or 54 % of all ordered vehicles.

Customer Satisfaction measure-ment and improvement is a key focus for FCSD. In July, the year-to-date CS Performance scores were: 70% for car service and 66% for commercial vehicle service.

Top 5 markets by volume Jan–July 2008

Top 5 markets by share Jan–July 2008Market ShareMarket Volume

Total industry Europe 2008 YTD

By Ingvar Sviggum

COMMENT

Vice President, Marketing Sales and Service

CarsCommercials

1. UK2. Turkey3. Ireland4. Hungary5. Spain

1. UK2. Germany3. Italy4. Russia5. Spain

16.4 %14.6 %13.5 %14.7 %9.6 %

Coverstory

World leaderThe all-new Fiesta is one of the most important cars in Ford Motor Company’s history. When it arrives in European showrooms in the next few weeks it will open an exciting new era in small car design, performance and functionality. But, more than that, it will mark the arrival of the first truly global Ford car

When Ford started to plan its new small car, it carried out extensive worldwide research, both to understand customer requirements and to assess the model’s suitability as a global car project.

When the report was produced, it made interesting reading. It revealed that customer demands and expecta-tions around the world were converging and thus a significant opportunity existed for a global vehicle.

Moving forward, a business case was established to produce the vehicle but it was not one based on a global sales figure; Ford did not set one. Instead, it took a new approach and decided to create a global vehicle development and manufacturing process that would enable it to react quickly to customer demand.

The process would also ensure that quality procedures could be replicated in manufacturing locations around the world, essential in delivering common, high-level production standards.

The latest Fiesta is the first product of that new process, known as GPDS (Global Product Development System).

It is also the first product of Alan Mulally’s One Ford vision of a single, global company designing and building cars for a global customer base. Fiesta is the template for the Company’s future generations of global models.

On sale in europe from next month in three- and five-door hatchback body styles, the model will be introduced in markets across Asia, South Africa, Australia and north America by 2010. It will be sold in a variety of regionally tailored models, all derived from a common base car.

extending the Fiesta’s traditional strengths of style, efficiency and value, the new model will appeal to a new generation of small car buyers through a mix of kinetic design and latest ‘big car’ technology.

Building on the appeal of the Verve Concept and successful production models, like the Mondeo and Focus, the Fiesta brings the modern and dynamic Ford of europe family look to the small car segment. Its bold face includes Ford’s ‘signature’ lower grille and large oval badge. Chrome and brightwork accents, wraparound

September 2008 | �

headlamps, pronounced wheel arch lips, a strong bodyside beltline and a sweep-ing roofl ine create a dynamic look.

The impact continues on the inside with high-quality fi nishes, contemporary materials and user interfaces inspired by mobile phones. It all communicates that the new Fiesta is no ordinary small car.

For the driver there is a ‘cockpit’ feel, with core controls within easy reach, including the new In-Car entertainment (ICe) system in the centre console. Steering wheel-mounted controls for key audio and vehicle systems are a ‘big car’ feature already found on Mondeo, S-MAX and Galaxy.

The newest Fiesta looks sophisti-cated inside and out, and its driving quality echoes that visual perception.

While it stands on virtually the same footprint as the previous model, the newcomer has lost weight, tipping the scales approximately 40 kilogrammes lighter, depending on engine choice, even after adding 10 kilogrammes in safety features and sound insulation.

Depending on the road conditions and the mood of the driver, the model offers a combination of sporty and dynamic handling, a smooth cruising ability and effortless driving in urban environments.

A key factor in its light, nimble handling is a new feature, the fi rst appli-cation of full electric Power Assist Steering (ePAS) on a european Ford. ePAS replaces the traditional hydraulic power-assist system of the previous-

Fiesta is not the only Ford small car making the news; the fi rst pictures of the new Ka were released last month, ahead of the vehicle’s debut at the Paris Motor Show in early October.

The new model makes its fi rst appear-ance 12 years after the original Ka was unveiled, but it has retained its prede-cessor’s fun personality, compact size, stylish looks and, Ford promises, its lively driving dynamics.

With a modern appearance based around Ford’s ‘kinetic design’ form language the new Ka is set to contin-ue the considerable success of the original model.

In total, Ka production has exceeded 1.4 million vehicles, and the model has remained tremendously popular among small-car buyers, inspiring fi erce loyalty from its owners.

The new model will be built in Poland.

generation Fiesta. It also delivers a noticeable reduction in real world fuel consumption. engineers also refi ned Ford’s electronic Stability Programme (eSP) for all-new Fiesta, which is avai-lable as an option across the range.

Under the stylish exterior of the car there is a robust body structure, crafted from high-strength and ultra-high strength steels, to protect occupants in the event of a collision.

Despite these advances in strength, however, the body structure overall is lighter than before. This means advances in safety have not been achieved at the expense of fuel econo-my and CO2 emissions.

Building on the benefi ts of a robust body structure is a range of safety fea-tures. These include the introduction of a new knee airbag into the car’s Intelligent Protection System (IPS), the fi rst appli-

Coverstory

Rebirth of an icon

10 | September 2008

cation of a knee airbag in a small Ford.That is complemented by a new front

seatback design to enhance whiplash protection and a special ‘crash pad’ carpet underlay in the driver’s footwell, which minimises loading to the lower leg during an impact.

Among an array of other features normally found only on big cars are easyFuel, the option of keyless entry and start, automatic heated screens and cruise control.

The powertrain story is just as strong, with four 16-valve Duratec petrol and two Duratorq TDCi diesel engines available, offering a projected range-wide CO2 average of 132 grams per kilometre (g/km), a 1.3 % improvement over the previous Fiesta.

Impressive, but for those who want to prioritise lower emissions an eCOnetic version of the new Fiesta is available.

Media driveWatch out for media driving impressions of the all-new Fiesta in the coming weeks.

The five-week media drive pro-gramme for the model started at the end of last month and runs through to the end of September.

Motoring and lifestyle writers and broadcasters from across Europe will travel to Siena, Italy, to put the Fiesta through its paces. Joining them will be motoring writers from North America, Asia-Pacific and Ford’s European Direct Markets.

Powered by a specially-calibrated ver-sion of the 90 PS 1.6-litre Duratorq TDCi, combined with coated Diesel Particulate Filter, the model achieves a class-lead-ing CO2 output of 98 grams per kilome-tre. That is matched by impressive fuel economy, with the car covering 100 kilometres using just 3.2 litres of fuel (equivalent to 76.3 mpg) on the eC Combined Cycle.

Compared with the previous-genera-tion Fiesta 1.6-litre TDCi, Ford of europe’s most frugal car ever will use 160 litres less fuel over 20,000km, offer-ing genuine savings in daily driving.

For petrol enthusiasts, a more power-ful 1.6-litre Duratec Twin Independent Variable Cam Timing (Ti-VCT) 120 PS engine is available. It accelerates the car from 0 to 100 km/h (0-62 mph) in 9.9 seconds and still returns a com-bined fuel economy of 5.9 litres per

100 kilometres (47.9 mpg) and CO2 emissions of 139 g/km.

The three other 16-valve Duratec pet-rol engines are a 60 PS and 82 PS 1.25-litre and a 96 PS 1.4-litre with a choice of the Durashift 5-speed manual transmis-sion or Durashift 4-speed automatic.

Thanks to its improved powertrain calibration and its reduced weight, the new Fiesta achieves overall a 22 % improvement in 0-62 mph acceleration and 14 % better in-gear acceleration.

Like its predecessors, the appeal of the new Fiesta is further enhanced by low cost of ownership. Helping owners to minimise running costs are improved fuel consumption across the range, lower repair costs and reduced insur-ance premiums.

“All-new Fiesta proves you can make a small car affordable and reliable, with-out compromising style, quality or fea-tures,” states the model’s chief carline engineer Joerg Beyer. “That’s the key to making all-new Fiesta truly desirable.”

It’s a message that will spread around the world.

Fiesta’s 360 degree focusThe marketing campaign for the Fiesta breaks new ground for Ford of Europe. Paul Thomas, vice president, Marketing, explains how …

How will the new Fiesta be marketed?The important thing when we take the new Fiesta to market is to recognise the very diverse customer groups we have across europe. We have our existing customers, male and female, who span a very wide age range. In addition, with this car in particular, we are targeting a younger audience, again both male and female. Different customers access different media. Younger customers, for example, are far more likely to use the web, while existing customers may be looking at Press and TV. So it is important in our communications that we implement a full 360 degree campaign, from TV to Press, internet and new media, direct mail, outdoor, radio and, of course, brochures.

First and foremost, we are targeting our existing customer base, loyal Fiesta customers across the market who’ve driven the current vehicle. We expect them to be really excited about this new car. Secondly, we are targeting customers who don’t buy a Ford today, who buy competitors’ products. We know in the B-Class market style is absolutely key, and with the new Fiesta we know we have the undisputed style leader in the segment.

You have mentioned the influence of new media, how are you making the most of that opportunity?This area of communications is moving faster than any other. So, to ensure we optimise our Fiesta communica-tions we have worked closely with both our own team and our agency partners to tap into the best expertise available today.

The pre-sales website that went live coincident with the opening of the British International Motor Show in July is a good example of this cooperation. It is specifically targeted at people who access web-based information and media. In addition, we launched the “Love Factory” concept in July – this too is targeted at a very different customer and transmitted through digital communications, like the web and sites such as YouTube. That helps to spread the word about the launch of the new Fiesta. Of course, we have other launch communica-tions planned to support the launch in October using the more established communication channels.

To achieve our aggressive sales and profit targets on the new Fiesta we must retain our existing owners and conquest new customers who are currently driving competitive vehicles. Since more and more customers are using the internet to obtain product and price information about potential purchas-

es before actually buying, this is a very important media channel within our overall Fiesta launch plans.

As I’ve said, increasing sales to younger customers is one of our targets – these customers are very style conscious. We know from our market research that customers view the new Fiesta as the style leader in the small car segment. We are using a wide spread of digital media to ensure our message reaches these potential customers since so many of them do not read motoring magazines or even the motoring pages in national newspapers. We need to have a presence in the places where these customers obtain their information, such as mobile phones, the web, blogs, etc. We will have a very professional and tailored presence in those media and I am confident our message will get out to these customers, as well as to our wider customer base.

Europe is a collection of different markets and cultures, what challenges does that bring when developing a pan-European campaign?When we’re developing a car we look at the highest volume markets for the vehicle, so for Fiesta that is UK, Italy, Germany, France and Spain. We have a focus on those markets, although we work with all our markets across europe to make sure we meet their requirements as best we can. While the various countries across europe are different, the car markets are actually more similar than people might imagine.

We have developed a pan-european marketing campaign for Fiesta that will be consistent across europe. each of our national Sales Companies has selected the mix of communi-cations material and media channels that will work best for them. The challenge for us has been to develop the best suite of communication assets available. By developing the material centrally we minimise the cost spent developing communica-tions material, thereby allowing more of our available budget to be spent on placing customer-facing media in the markets.

Global research reveals a trend for increasing vehicle customisation, how are you responding to that?Working with our colleagues in FCSD and Design we have a series of Individual packs across all our carlines and through this production channel we are able to offer our customers the opportunity to customise their vehicles. In addition, we have recently appointed an Individual Brand Manager within

interview

12 | September 2008

Paul Thomas believes new media is vital for attracting style conscious, younger custom-ers. Blogs, mobile phones andnetworking sites such as facebook are all important channels

Marketing – this role will be key in working with the various areas of Marketing and the national Sales Companies to maximise our sales opportunities on Individual products.

At the British International Motor Show in July we showed Individual versions of a number of vehicles, including the new Fiesta.

Another trend is for sustainable motoring. Again, how is Ford responding to that? Our response has been to introduce our eCOnetic range of vehicles. These are currently available on Focus and Mondeo, with Fiesta planned for introduction later this year. The Fiesta eCOnetic produces a class leading 98 grams of CO2 per kilo-metre, which is equivalent to 76.3 mpg (3.2 litres per 100 kms). That is the lowest fuel economy of any family vehicle available on the market today. So we are responding with affordable, cost effective solutions that work for our customers. In addition, we have embarked on specifi c advertising for our eCOnetic models. We have developed a suite of communica-tions that our markets can use to promote these vehicles because we really do have a great story to tell.

Is the Feel the difference strategy meeting its objectives?We started the Feel the difference strategy in europe in early 2006. It has been a focus for all that we do, not just in communications but in Design, Product Development, Business Strategy and certainly in our Sales and Marketing.

It is not just about the vehicles we have launched over the last two-and-a-half years, it includes all the products we are developing for introduction beyond 2008.

In addition to the style and substance of our new vehicles, we are also focussing on the Ford brand image in europe and that’s a key element of our Feel the difference strategy.

We know that two key factors infl uence customers to make that all important fi rst visit to the Dealership to buy a new vehicle – they are Product and Brand. Is it a product I like and is it a brand I am prepared to drive? We have seen the brand metrics, which measure the likeability of the Ford Brand, starting to improve. But we cannot rest on our laurels, so we have embarked on a study to ascertain exactly where we want to take the Ford brand in europe and, importantly, how we are going to get it there. Feel the difference is a long-term strategy that is here to stay!

Interview by Peter Noble

September 2008 | 13

Stylish websites highlight Fiesta’s technololgy and design features and also help to infl uence the brand image

1� | September 2008

The world is constantly changing. Human beings are growing in number, height and waist size.

We are also becoming more demanding, better informed and more focussed on

environmental issues.

In this fast moving world, it is essential for companies like Ford to keep pace with a myriad of

demographic and consumer trends. These trends affect every aspect of the business, from Design to

Communications, HR to Marketing. Unlike fads, which come and go quickly, trends are established

over time. They evolve as a result of demographic changes, collect momentum and continue evolving.

Ford researches these trends continuously. Here are some of the key fi ndings …

Trends Global demographic trendsMore people – The world population is expected to grow from 6.5 billion to 9 billion by 2050. Remarkably, India and China currently account for one third of the 76 million people added to the world population each year.

Aging population – Global aging is regarded as one of the biggest challenges facing the world today. no other issue is predicted to have as profound an effect on living standards, the global economy and world order. To put this into context, historically populations have a pyramid-shaped age distribution, with more young than old. However, as a result of an aging population and declining fertility, the old (50+) will soon outnumber the young, causing the pyramid to invert. As life expectancy rises, it raises serious questions about the fi nancial viability of pensions and provision of health-care systems for the elderly. In Japan, for instance, one in seven crimes last year was committed by someone over the age of 65. experts blame this on a lack of fi nancial provision and job opportunities for the older generation.

Declining fertility – In 1950, the global rate of children per woman was fi ve, however by 2050 this is predicted to fall below replacement level at 2.05 children per woman. The main reasons for this are delayed marriage and parent-hood, declining rates of fertility, more singles and conscious decisions by couples to have fewer or no children. This trend is very pronounced in developed countries, however there are some Asian, African and Middle eastern countries with spiralling birth rates and younger populations.

Feature

September 2008 | 1�

Urbanisation – For the fi rst time in history, the majority of the world will soon no longer be rural dwellers but urban dwellers. We will also see the emergence of more very large cities, or mega cities, with populations of ten million or more. In Asia alone, four more mega cities are expected to bring the worldwide total to 23 by 2015.

Rising power of women – In the 20th century, there was signifi cant progress in women’s equality and this progress is now expected to accelerate and spread further. Women

today have more opportunities than ever in terms of education, employment and social identity. This leads to women becom-ing an increasingly powerful and infl uential consumer group.

Increasing migration and ethnic diversity – The more developed regions are expected to continue being net receivers of international migrants, with an average gain of about two million per year. With fewer young people, the immigrant population is helping countries to fi ll jobs and maintain the natural balance of the economy.

Established consumer trendsSustainability and ethical consumption – Concerns over health, social and environmental issues are having an ever greater infl uence on consumer behaviour. Many of these changes are driven by the rapid introduction of government taxes and penalties, as well as by an increased media focus.

A study by US market research company Harris Interactive revealed that 33 % of college students are driven towards brands that are seen as environmentally or socially responsible.

even supermarkets are affected. Tesco, which produces two million tonnes of carbon a year in the UK, is planning to put labels on every one of its 70,000 products so that shoppers can compare carbon costs in the same way as comparing salt and calorie contents.

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16 | September 2008

creating the world’s fi rst global community, where word of mouth is king and consuming information through such technology is becoming a way of life. Young people also have an increasing infl uence on the buying decisions of older people.

In a worldwide study, 50 % of all 8–14 year-olds said they would rather throw out their TV than be without the internet.

Emerging consumer trendsChanging defi nition of luxury – Luxury is fragmenting into affordable and super luxury. Many products traditionally regarded as luxury or premium have become mainstream and attainable. Luxury – particularly in developed markets – is now becoming more about life experiences, rather than displays of material wealth.

The super rich are fi nding new ways to differentiate themselves, with a greater propensity towards excessive displays of wealth, such as private yachts, a fl eet of personal jets and exclusive access to clubs and events. notably, free time is now emerging as the greatest luxury for many people.

The simple life – Conversely, as life gets more hectic, the desire to get back to simple, basic pleasures is growing. People are overloaded with choice and information, leaving many striving for what is known as ‘simplexity’.

From a business viewpoint, many companies are now realising that too much choice can be confusing – the trick is to deliver variety but still keep it simple for consumers.

Richard Noble

This trend toward sustainability and ethical consumption is much more pronounced in developed countries. In less developed regions simple economics still play a far more important role.

Changing physiology – People are getting taller and heavier, with no sign of a slowdown in the rate of obesity. This is the result of a combination of natural and man-made causes. In most developed countries up to 50 % of the population is now classifi ed as overweight or clinically obese. Globally, more than 700 million adults are projected to be obese by 2015, compared with 400 million in 2005.

Make it mine customisation – Consumers are developing an ever stronger desire to express themselves through the products they choose. They are less likely to compromise and no longer want what everyone else has. They want limited editions, one-off products and bespoke items. Companies investing in personalised products are experiencing greater customer loyalty and the ability to command premium prices.

In the US, Arizona-based Cold Stone Creamery grew fi ve times faster than Baskin Robbins last year by inviting customers to blend their ice cream with their own choice of mix-ins.

Youth infl uence – With the growth of the internet, young people around the world are connected like never before, sharing information and setting the tone for consumers of all ages. eventually, global youth will share more in common with each other than with older generations in their own countries.

Strong economies and greater wealth has led to young people (25 years-old and under) emerging as a powerful consumer group with considerable spending power. They are driven by a culture of ‘instant gratifi cation’ and are unlikely to compromise on what they want.

The massive growth in social networking websites is

Two unique and specially-restored Ford race cars returned to the famous Le Mans 24 Hours circuit this summer for the 2008 Le Mans Classic. The two cars, a 1923 Model T Montier and a 1973 Ford Capri RS2600, took to the track to compete under the ‘ecurie Ford France’ banner.

The Model T, which took part in the very first Le Mans 24 Hour race in 1923, is the oldest car ever to have taken part in the prestigious Le Mans Classic. After a heroic performance in

front of 81,000 spectators, it finished 49th out of 63 entrants.

The Capri RS2600, with its V6 engine developing almost 400 PS, was a major player in touring car races in the early 1970s. It originally competed in the event in 1974 but failed to finish. It ended the Classic in 17th position but, crucially, won the Index of Performance (similar to a handicap system in golf), illustrating the outstanding performance of its V6 engine.

Model T and Capri star at Le Mans

BP Ford Abu Dhabi World Rally Team endured a difficult weekend in last month’s Rallye Deutschland. Mikko Hirvonen and Jarmo Lehtinen were fourth in their Ford Focus RS World Rally Car while team-mates Jari-Matti Latvala and Miikka Anttila finished ninth on this second asphalt event of the season.

Hirvonen ran as a high as second before a puncture dropped him down the leaderboard. Latvala rolled his Focus on day two and also suffered puncture problems.

Citroën’s Sébastien Loeb won to move into a four-point lead in the Drivers’ championship. The result means Citroën has an eight point advantage in the Manufacturers’ series.

’08 Focus RS WRC has more style and powerThe 2008 version of the record-breaking Focus RS World Rally Car made its debut in last month’s Rallye Deutschland. At the front, the car now reflects the eye-catching look of the recently-previewed Focus RS road car. Mechanical changes focus on a new turbocharger and crankshaft, which increase the range of power available.

Ford struggles in Rallye DeutschlandRecord breaking Focus entry in Germany A record 13 Focus RS World Rally cars competed in Rallye Deut-schland. Along with the three crews from the BP Ford Abu Dhabi World Rally Team and four from Stobart VK M-Sport Ford were five crews from Holland and the ’06 specification Focus of Norwegian Andreas Mikkelsen.

Hirvonen – title fight could go to the wireBP Ford Abu Dhabi ace Mikko Hirvonen believes the race for the World Drivers’ Championship will go right to the wire.

The 27 year-old Finn is expecting Citroën’s Sébastien Loeb to pile on the pressure in the second half of the season but believes he can stop him from clinching a fifth consecutive Drivers’ crown.

“I think the tarmac Mediterranean events will be crucial,” Hirvo-nen said. “It’s important we don’t let Sébastien, Dani Sordo and Citroën have too much success on tarmac. If I can score well on these events I think I’ll have an excellent chance of the title but it’s going to be tough for sure.”

18 | September 2008

Executive editor: Emmanuel Lubrani, elubrani@ford.com | Copy editor: Richard Noble, r noble9@ford.com | Design: Manfred Müller, mmuell86@ford.com,  

Annette Vellay,  Alexander Bertrams | Production: Zetweka, Print & Production Management, Cologne | Digital Reproduction: purpur, Cologne |

Print: Neef & Stumme, Wittingen | Published by Ford of Europe, Communications and Public Affairs

Ford

ONE Ford drives Russian revolution“The success was using the CCAT process as the enabler to deliver above-typical results,” said Lisa Tresigne-King, director, Global Raw Materials and Stampings. “We took advantage of the CCAT process and its collaborative style to provide a work environment that allowed us to focus, share objectives and drive to deliver,” she said.

Best of all, the targeted cost savings will be realised by year’s end.In Europe, a cross-functional group of Information Technology, Material Planning & Logistics and Accounting staffers formed a rapid response team to reduce the costs for exporting vehicles into Russia.

Rather than having such vehicles as the Ford Fiesta, Fusion, Focus, Mondeo and S-MAX shipped through Finland and Poland, and cleared by Russian customs in Moscow, the Ford of Europe team developed the process to clear as many as 70,000 vehicles a year through the Russian seaport enclave of Kaliningrad, located between Poland and Lithuania on the Baltic Sea.

Using Kaliningrad as the entry to Russia reduces customs’ duties, taxes, truck usage and courier charges and speeds up payments, said team member Nik Benford, who works in IT in Warley, England.

The team was led by Tom Davies, supervisor, European Vehicle Accounting Systems and Bob Gregory, supervisor, Vehicle Scheduling and Distribution, who worked with Dr. Bert Bong, manager, Vehicle Logistics Europe and Mick Flynn’s Accounting Business development team.

Set up in May of this year, the team completed the research, documentation and the change by August. Benford said the project was challenging but rewarding. “It required people to be creative and work outside normal boundaries. Special credit should go to the team who worked on it and stepped up to make it happen,” he said.

The change cost approximately $100,000 to implement but will save the company approxi-mately $7 million a year.

The programme will also be expanded to han-dle exports of the Ford Transit van, said Benford.

Jessica Thiringer

Ford Motor Company employees are delivering business results globally using the principles and behaviors of ONE Ford – and finding new opportunities to integrate ONE Ford into the corporate culture.

In North America, members of the body structures product development department and the stamping and steel purchasing section had a target to save $115.5 million in expenses for 2008.

To help realise that goal they formed a Cross-Commodity Attack Team (CCAT) to reduce costs and streamline the process from the time a com-ponent is designed to the time it’s manufactured.

The CCAT process allowed for co-location of a team comprised of more than 100 members from Manufacturing, Purchasing, Product Devel-opment, Lean Manufacturing and Cost Estimat-ing. Together, the team worked on 15 separate work streams to find cost savings opportunities.

“Communication was so much easier and issues were resolved more quickly. The real benefit is that a centralised location made it simpler to make plans and provide the information to management for quick decisions,” said Tam Cam, finance supervisor, North American Cost Estimating.

The European cross-functional team behind the “Kaliningrad” project consisted of Nik Benford, Bert Bong (left), Chris Caulfield, Tom Davies, Mick Flynn, Bob Gregory (right), Peter Linnemann, Gavin Mills, Natalia Petrenko, Udo Ries, Dirk Theissen and Laura Wetzel

ONE Ford

Introduced in January, ONE Ford balances “One Team, One Plan, One Goal” and the Ford Expected Behaviors necessary to achieve the Company’s plan. For more information, please visit www.one.ford.com.

These stories represent two of the many examples of employees using ONE Ford to deliver the business plan. To share a story, please e-mail: oneford@ford.com.

Diversity

September 2008 | 1�

Supporting female engineers of the futureEach year the Henry Ford Scholarship Programme gives a select group of female engineering students an invaluable insight into life at Ford. Run by Ford of Germany, in association with the University of Aachen, the scholarship programme also offers financial support and mentoring to the young women

Around 25 female Bachelors or Masters mechanical degree students hold Henry Ford scholarships at any one time. To qualify for the programme the women need to be enrolled in a mechani-cal engineering degree at the University of Aachen, have above average academic achievements and be involved in activities beyond their university education.

Each student receives a monthly grant. In addition to this financial support the young women participate in a comprehen-sive programme that includes team building weekends and soft and hard skill training courses such as time management, presentations, project management and computer skills. Seven Ford engineers act as mentors to the students, supporting them in a wide variety of ways. Furthermore, each student spends at least one day per year shadowing a Ford engineer at work and 12-14 per year do internships at Ford.

Once a year the students are invited to attend a Career Day at Ford’s Cologne facility. The day is an opportunity for them to take

a closer look at the Company and get to know some of the different areas. This year the students spent the day in the Manufacturing Business Office (MBO) and the Tool Shop. They also got to meet the two newest members of the Ford family – the Fiesta and Kuga.

In the evening the scholarship holders were invited to a Management Get Together hosted by Jim Tetreault, vice president, Manufacturing, Ford of Europe. The evening was an opportunity to celebrate the ongoing success of the programme – five graduates now working for Ford gave a short presentation – as well as to explain the programme to a group of around 30 Ford managers.

“The scholarship programme is a fantastic way to bring the female engineering talents of the future into Ford,” explained Mechthild Cremer, part of the HR team behind the programme. “They get to see the inner workings of the Company, experience how we work and, most importantly, get to know the people. It is an invaluable experience for them and for us.”

Class of 2008: The students meet the all-new Fiesta during the annual Career Day in Cologne