CHAIRMAN’S MESSAGE (CONTINUED) Innovation One of the ways we plan to differentiate  ourselves is by becoming a leader in offering  innovations that make a difference for our  customers and the world in which they live. A  great example of this is the Ford Escape Hybrid. Escape Hybrid can do anything that our regular  Escape can, only with up to 75 percent better fuel  economy in city driving. It is not just a sensible  solution that uses new technology. It is a hot- selling new product which is appealing to every  demographic group. Escape Hybrid also was  named “North American Truck of the Year.” Hybrids represent an opportunity for us to  differentiate ourselves. For the first time in many years, there are companies that have a significant  new technology, and companies that don’t. We have our own patented hybrid technology  and proprietary drive system and electronic  controls. By the time many of our competitors offer  a hybrid, we’ll be on to our next generation, and  some won’t be able to afford their own systems. In the next three years, we will have four other  hybrids joining the Escape: Mercury Mariner,  which we’ve pulled ahead to go on sale in the  United States later this year, Ford Fusion, Mercury  Milan and Mazda Tribute. Much of what we’ve  learned in developing these hybrids will help us  as we explore other alternative fuel technologies. Sustainability The Family Of Ford Our customers are concerned about energy  security, the price of fuel and the threat of climate  change. Providing market-driven solutions to these  issues is an outstanding business opportunity. My great-grandfather’s vision was to provide  affordable transportation for the world. I want to  expand that vision for the 21st century and provide transportation that is affordable in every sense of the word – socially and  environmentally, as well as economically. In other words, sustainable transportation. This is another way in which we plan to differentiate  ourselves. We are the only auto company doing  serious development work with four of the most  promising advanced fuel technologies: clean  diesels, gasoline-electric hybrids, hydrogen-powered  internal combustion engines and fuel cell vehicles. We are working hard to introduce technologies in  the near term that help improve fuel economy and  reduce greenhouse gases that affect the climate. As  we look further ahead, we are especially excited  about creating a path to a clean, renewable,  hydrogen-powered future. We are investing huge  resources to advance and demonstrate hydrogen  technology. Ford is a leader in hydrogen-powered  Internal Combustion Engines (ICE). Our E-450  Hydrogen ICE shuttle buses are the first commercially  available hydrogen vehicles in North America.  We also are testing a state-of-the-art Ford Focus  Fuel Cell vehicle in fleets around the world. We are doing our development in-house, with  technical talent and a depth of capability that we’d  match against anyone in the world. However, given  the enormity of the task, we believe that partnerships  involving industry, energy providers and government  will be required to make hydrogen power a reality.  We are working to make that happen through  partnerships with the U.S. Department of Energy,  the State of Florida, BP, Fuel Cells Canada, the  Clean Energy Partnership in Germany and others. There are many obstacles to overcome, but the  potential rewards of hydrogen power are tremendous.  It could redefine the competitive landscape of  the automotive industry in the 21st century. The innovations that will give us a competitive  advantage in the near future and in the long term  will come from our 325,000 employees around the  world. I believe that our people are our greatest  asset, which means the most fundamental way  for us to differentiate ourselves is by leveraging  their strengths. This has been a key element of  our strategic plan for the last three years. It also  is an area that builds on our unique heritage.  6