To:  Ford employees and others
Subject:  (I) Let's Chat About the Business

Yesterday, Bill Ford and I spent much of the day with a group of our senior leadership discussing one of our five key areas of competitive advantage -- corporate citizenship.  Joining in the conversation were two guests, Sir John Browne, the CEO of BP Amoco, and John Elkington, the CEO of London-based SustainAbility, a firm that has helped a number of leading companies develop their corporate responsibility strategies.

Like Ford Motor Company, BP Amoco is committed to superior business performance and is transforming itself by fundamentally rethinking what it means to be in the energy industry.  Also like Ford, BP Amoco appreciates that corporate citizenship is an essential element of strong competitive performance and has done a lot of work in striving to understand what it means to be a socially responsible company.

Traditionally, many of us have considered corporate citizenship as philanthropy and volunteer programs.  Let me assure you, it is much more than that.  It's about who we are, what we offer in the marketplace and how we conduct our business.  It's our reputation.  We will be a leader in corporate citizenship if we are a well-respected, admired and trusted company that people believe contributes positively to society and uses its resources to create a more sustainable world.

Expectations for performance by large, global companies are much greater than ever.  It is no longer enough for us to just produce good products and employ and treat people fairly.  We are expected to help find solutions to the environmental, social and economic problems facing the world.  We are expected to take the perspectives of the broad range of people and groups who are affected by our operations into account when we make decisions.  This doesn't mean we always agree with them -- but they do expect to be heard and responded to.  We are expected to operate in a more open and transparent way, including setting social and environmental performance targets and reporting our progress.

I believe that these expectations will increase significantly during the next decade. The number and influence of activists demanding greater corporate accountability are growing rapidly.  The Internet gives everyone access to all sorts of information and makes virtual boycotts a reality. Perhaps one of the most important drivers for increased corporate accountability is the increasing cynicism that business, especially big business, isn't trustworthy.  It's no longer good enough to say, "Trust us, we know what's best."  Instead, consumers are urging companies to show what they're doing and the principles that guide their business operations.

The automotive industry is likely to be a target of increased scrutiny in the coming decade.  Global climate change, urban congestion and sprawl, human rights and globalization are just a few of the issues that will increase public discussion about our role, our products, our impact in the world and our responsibilities.

All these considerations highlight the importance of corporate citizenship to our overall business transformation. Although we've received favorable reaction to some of the actions we've taken recently -- particularly on the environmental front -- our overall reputation as a responsible corporate citizen is mixed.  Bolder commitments and actions will be needed to distinguish us as a leader.  Consequently, with Bill Ford's whole-hearted support, I have appointed a group of our senior executives to a Corporate Citizenship Council and charged them with the design and execution of an integrated corporate citizenship strategy.  Marty Zimmerman, vice president, Governmental Affairs, and Deborah Zemke, director, Corporate Governance, will support their efforts.  During the next year, you will be hearing more about the council's work.

Much of the initial emphasis for the council will be on building relationships with a broader group of stakeholders to discuss issues that include the future of our industry in the world and the expectations for leadership in corporate citizenship.  Responsible action will accelerate our transition to a leading consumer company and one of the most highly regarded companies in the world.

An inspired global team -- consumer-focused and shareholder-driven,

Jac

http://www.dearborn2.ford.com/jnchat