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2000 Restructuring of the Automotive Operations:

• Restructuring overview

• Costs and investments

• Capacity adjustment

• Manual transmission Joint Venture

• Dagenham Diesel engine extension

• The workforce side

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Ford of Europe: 2000 Restructuring

COLOGNE, Germany, May 12, 2000 - Ford's announcement today of plans for the restructuring of its European operations will tackle over-capacity in its vehicle assembly plants and allow a crucial reduction of production volumes to realistic levels.

1999: 2.2 million vehicles built vs 1.65 million vehicles sold

In 1999 Ford of Europe had the capacity to build 2.2 million vehicles, but sold only 1.65 million. A wide-ranging business review of the entire Ford of Europe operation has identified that the company has one plant too many involved in vehicle production.

Ford of Europe President, David Thursfield, and his business review team concluded that to leave the situation unaddressed would not only threaten the viability of all Ford's plants, but also maintain an unsatisfactory business situation.

"I know that what we plan to implement will be more difficult and painful for some than others, but the study team has examined every possibility, every option, and its recommendations are, we believe, the best way forward," said Mr.Thursfield.

Ford is aiming at a $1 billion cost saving

"Through these actions Ford of Europe will emerge as a more vigorous, competitive and dynamic company. We are aiming for cost reductions of over $1 billion and these actions will be the single largest contribution to that goal. "

Today's disclosure of details in the review represents the culmination of Ford's restructuring of its European operations, which also included

• the sale of the Azambuja plant in Portugal;

• closure of the Plonsk plant in Poland;

• transferring Halewood production over to Jaguar;

• ending production of the Scorpio in Cologne;

• selling Ford's share in the AutoEuropa facility in Portugal to former project partner VW;

• and a realignment of the workforce at Genk in Belgium to meet demand in the C/D car segment.

• It is additionally supported by today's announcement that vehicle production will cease at Ford's Obchuk plant in the Minsk region of Belarus.

All of these actions contribute to significant overall capacity reduction.

Additional to these actions has been a re-balancing of capacity utilisation of engine production between Bridgend, Valencia and Cologne. A key new element of the plan will be the cessation of vehicle assembly and major body construction at Dagenham, to be achieved by the first quarter of 2002.

"Our new European management team plans to transform Ford's business in Europe with accelerated product programmes - nine significant new product actions every year over the next five years - and a rigorous focus on cost and asset utilisation in particular. The plan targets growth in sales volume, market share and much improved financial performance, in the next three to five years," Mr Scheele added.