This summary is based on the first quarter fiscal 2007 earnings call conducted by Ford Motor Co. (F: chart) on April 26, 2007.

Management:

– President & CEO: Alan Mulally
– CFO: Don Leclair
– CFO, Ford Credit: K.R. Kent
– Director IR: Lillian McCormick

Key Investors Issues

- Revenue increased 5% from $40.8 billion in 2006 to $43 billion.
- The firm realized a loss of $171 million, down from a profit of $223 million in the prior year.
- Wholesale unit volumes were 106,000 units to 1.65 million units.

First Quarter Highlights

Wholesale unit volumes were 1.65 million, down 106,000 units from the prior year though revenue increased 5% to $43 billion, reflecting mix improvements and exchange, partially offset by the lower volume.

- The firm realized a net loss of $171 million or 9 cents a share, from a profit of $223 million or 12 cents a share in the prior, including $157 million improvement in automotive operating profits, though this was more than offset by the higher net interest expense and lower financial services profits.
- Automotive results were stronger than expected, largely due to the recognition of favorable quality trends, strong cost performance in North America and timing of retail incentives and fleet sales.
- PAG and Ford of Europe both performed well and ahead of expectations, with PAG recording a profit.
The firm ended the period with $35.2 billion, up $1.3 billion from the prior year, with operating cash flow of $1.1 billion, including favorable net spending of $500 million due to the rear loaded timing of capital spending.

- Working capital changes of $800 million favorable also contributed, reflecting production in North America coming up from an unusually low production level in 2006.
- Separation programs resulted in an outflow of $1.2 billion and the firm contributed $900 million to pension plans and the impact of the VEBA drawdown strategy had a net favorable of $400 million.

Regional Operational Highlights:

- In North America wholesales were down by $723 million, reflecting lower market share, primarily lower fleet sales and unfavorable dealer inventory changes.
- U.S. dealer inventories were down 27% to 214,000 units from a year ago to the dealer day supply of 62.
- Revenue was $18.2 billion, down $1.6 billion from a year ago, due to lower volume offset partly by favorable mix in pricing.
- Net pricing was $200 million favorable, largely reflecting lower daily rental mix, lower lease mix and the timing of incentives.
- In addition, cost reductions were $400 million favorable reflecting lower pension in OPEB, warranty, manufacturing costs offset by higher regulatory commodity and product enhancing costs.

In addition, the Ford Fusion, Mercury Milan and Lincoln MKZ set monthly sales records in March.

- The Ford Expedition and Lincoln Navigator sales also have been strong and Expedition sales have been up for each of the last seven months, and Navigator up in the five of the last six.
- Lincoln sales in total are up 10% year-over-year and the launch of the new F-series Super Duty is going smoothly along with that of new Ford Escape and Mercury Mariner.
- The 2008 Ford Focus is redesigned and refined both inside and out and demonstrates commitment to growing the small car business.

The new 2008 Taurus, Sable and Taurus X, which will replace the Ford 500, Mercury Montego and Ford Freestyle will get a new look, on the outside and on the inside and a new engine with 30% more horsepower.

- At the Geneva Motor Show in March, the firm introduced and are now in production the all-new Ford Mondeo, Ford of Europe''s flagship car.
- Also at the show, the firm rolled out the redesigned Ford C-MAX, a compact five-seat multi-activity vehicle.
- In the U.S. the Ford Edge and the Lincoln MKX are performing very well, and the Ford Fusion, Mercury Milan and Lincoln MKZ set monthly sales records in March.
- In addition, the F Series Super Duty introduction is going smoothly.
The overall business made progress, including achieving $500 million in cost savings, $400 million of which is in North America, which on a cumulative basis has now achieved $1.9 billion out of the $5 billion target.

- The company reduced North American personnel positions by 18,000 and achieved these hourly and salary reductions with minimum disruption to the business and continuing quality improvement.
- Additionally, the firm completed the sale of one ACH business and reached agreement to sell another and inn April, reached another agreement to sell an additional ACH business, which brings the total to five businesses either sold or with an agreement for sale.
- The sale of APCO was completed in April and an agreement to sell Aston Martin was reached.

Based on the internal quality report, which measures customers'' impressions of their new vehicles after having them for three months, Ford, Lincoln and Mercury vehicles have reached Toyota brand quality.

- Solid vehicle launch processes, quality of design, supplier performance and improved teamwork are paying off.
- The global product development team is driving efficiencies across the business units as demonstrated by plans for the new global B-car that will be designed and engineered out of one location.

The net loss was $282 million, which included $2 million of profit from discontinued operations, and that reflected APCO, an insurance company that was sold during the period.

- The net loss from continuing operations of $284 million included taxes in areas outside of the U.S. where the firm is profitable, and included minority interests in profitable joint ventures.
- Special items included $874 million from personnel reduction actions, largely related to the previously announced salaried personnel reduction plan, and that was partially offset by savings associated with the decision of about 2000 hourly workers who withdraw their prior decision to accept the buyout offer during the quarter.
- In addition, there was a gain of $960 million for OPEB curtailment related to the North American hourly separation programs and a charge of $175 million for pension curtailment related to the salary separations.
- The firm will continue to reduce personnel and restructure the businesses outside of the U.S. and charges during the first quarter for those actions were $24 million.