## 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 

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 Family Of Ford 

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. 

