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Mr. Embargo
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Ford Motor Company [NYSE: F] today announced it has signed new agreements with Visteon Corporation -- its largest supplier and former automotive components subsidiary -- that improve the competitiveness of both companies.

The agreements primarily address pricing and sourcing arrangements between Ford and Visteon, as well as costs related to approximately 20,000 UAW-represented Ford employees working at Visteon. These employees were assigned to Visteon as part of Visteon's June 2000 spin off from Ford.

"The agreements we signed with Visteon will enable our largest supplier to deliver parts and components to Ford at more competitive prices," said Don Leclair, Ford Motor Company's chief financial officer. "That's good business, because our ability to compete relies, in part, on partnering with our suppliers. With the UAW's strong support, we have laid the foundation for a stronger Visteon, and, thus, a stronger Ford Motor Company."

The principal highlights of the agreements include:

Purchasing and Supply Elements (North America):

A payment of $150 million from Visteon to Ford on the automaker's 2003 purchases. This is in lieu of further price reductions for 2003. In addition, Visteon has committed to a schedule of annual price reductions over the next four years and other actions that should enable Visteon to achieve fully competitive prices over time.

All new Ford business sourced to Visteon will be at competitive prices and terms. Ford will provide labor differential relief for UAW workers at efficient manning levels.

Ford agreed to look to Visteon first for new business at UAW-represented Visteon plants. However, Ford can seek alternative sourcing solutions if Visteon is not competitive.

Cost-Sharing Elements:

Ford will assume about $1.65 billion of Visteon's total estimated $3 billion post-retirement health care and life insurance benefit liabilities (OPEB) related to UAW-represented Ford employees at Visteon.

Visteon and Ford will share equally up to $200 million in costs to upgrade Visteon's information and technology systems as it completes its separation from Ford's IT systems.

Other Elements:

As job openings occur, Ford employees assigned to Visteon will return to Ford over time. As agreed to in concept by the UAW (the final terms presently are being negotiated between Visteon and the UAW), Visteon will fill future job openings with UAW-represented workers earning Tier I UAW supplier-level wages.

The timeframe for Visteon to fund its remaining post-retirement OPEB liability - which begins in 2006 -- will be extended to 2049 from 2020.

Visteon's contributions to potential profit-sharing payments for UAW-represented Ford employees will be capped at $2,040 per employee.

Ford and Visteon will share equally future Visteon capital investments for select products. Payments from Ford to Visteon will be made over a seven-year period for each investment.

Ford will accelerate payment terms to Visteon over the next three years, after which terms will return to normal.

A Ford-Visteon governance council will be established to monitor the relationship between the two companies, as well as manage implementation of the agreements.

Financial Impact to Ford Motor Company:

A net pre-tax charge will be incurred in the 2003 fourth quarter of $1.6 billion, or $0.52 per share.

The charge includes approximately $1.65 billion of transferred OPEB liability and $100 million of IT separation costs, offset partly by the $150 million payment on 2003 Visteon purchases by Ford.

The OPEB liability transfer will have minimal impact on Ford's near-term cash flow, because the additional liability will not be fully due for about 50 years. Ford's health care expense will increase by about $100 million annually, beginning in 2004.

Other Fourth Quarter Matters:

Ford will take a non-cash, pre-tax charge of approximately $150 million for disposition of several non-core businesses. These operations are being "held for sale." Additional charges of about $100-to-$150 million for disposition of non-core businesses are anticipated during 2004.

The fourth-quarter charge for our previously announced restructuring of Ford Europe will be about $450 million. The remaining expected charges (about $100-to-$150 million) associated with these restructuring actions will occur in the first half of 2004.

The effect of all fourth-quarter special items on earnings per share is expected to be $0.72.

Ford will contribute $1 billion to its U.S. pension funds and $6 billion to its Voluntary Employees' Beneficiary Association (VEBA) trust. Of the contribution to the VEBA trust, $2 billion will be set aside for long-term investments.

Increased Earnings Guidance:

Excluding special items, the Company increased its full-year 2003 earnings guidance from continuing operations from its $0.95-to-$1.05 per share range to a new range of $1.05-to-$1.10 per share.

"The increase in our 2003 earnings outlook primarily reflects continued strong cost savings, strong unit revenue from the new F-150 and other vehicles, and the ongoing strength of Ford Motor Credit's operating results," Leclair said.

Conference Call Scheduled

Investors and media can hear Ford CFO Don Leclair discuss today's announcements via conference call at 800-901-5217 (617-786-2964 for international dial-in) or on the Internet at "" . Supporting presentation materials will be available at the same Internet address. The presentation will begin at 9:00 a.m. EDT, Dec. 22. Replays of the call will be available at 888-286-8010 (617-801-6888 for international dial-in for seven days.)

Ford Motor Company, headquartered in Dearborn, Mich., is the world's second largest automaker, with approximately 335,000 employees in 200 markets on six continents. Its automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive-related services include Ford Credit, Quality Care and Hertz. Ford Motor Company celebrated its 100th anniversary on June 16, 2003.





From Continuing Operations, Excluding Special Items
$1.05 - $1.10

Special Items

Cumulative Effect of Accounting Changes

Discontinued Operations

Net Income
$0.18 - $0.23

Statements included or incorporated by reference herein may constitute "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from those stated, including, without limitation:

greater price competition in the U.S. and Europe resulting from currency fluctuations, industry overcapacity or other factors;

a significant decline in industry sales, particularly in the U.S. or Europe, resulting from slowing economic growth, geo-political events or other factors;

lower-than-anticipated market acceptance of new or existing products;

work stoppages at key Ford or supplier facilities or other interruptions of supplies;

the discovery of defects in vehicles resulting in delays in new model launches, recall campaigns or increased warranty costs;

increased safety, emissions, fuel economy or other regulation resulting in higher costs and/or sales restrictions;

unusual or significant litigation or governmental investigations arising out of alleged defects in our products or otherwise;

worse-than-assumed economic and demographic experience for our post-retirement benefit plans (e.g., investment returns, interest rates, health care cost trends, benefit improvements);

currency or commodity price fluctuations;

a market shift from truck sales in the U.S.;

economic difficulties in South America or Asia;

reduced availability of or higher prices for fuel;

labor or other constraints on our ability to restructure our business;

a change in our requirements under long-term supply arrangements under which we are obligated to purchase minimum quantities or pay minimum amounts;

a further credit rating downgrade;

inability to access debt or securitization markets around the world at competitive rates or in sufficient amounts;

higher-than-expected credit losses;

lower-than-anticipated residual values for leased vehicles;

increased price competition in the rental car industry and/or a general decline in business or leisure travel due to terrorist attacks, act of war or measures taken by governments in response thereto that negatively affect the travel industry; and

our inability to implement the Revitalization Plan.
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