1. SC Word 2000 (Buersmeyer) 1 Ford Motor Company E-Business Initiatives Brian Buersmeyer Strategic Planning Manager, e-Business Material Planning and Logistics Copyright 2000 by Ford Motor

2. SC Word 2000 (Buersmeyer) 2 Recap recent announcements Overview of auto-xchange (now Newco) Link between e-Business and Ford’s overall corporate strategy Presentation Overview

3. SC Word 2000 (Buersmeyer) 3 Recent Developments Goal: Reduce working capital by shrinking excess inventories and wiping out costly rebates needed to sell vehicles off dealer lots Retailing How: Set up BuyerConnection web site and joined MSN CarPoint site, where consumers can order custom-assembled cars, track their progress, and apply for financing Strategic Partner: Trilogy Corporation

4. SC Word 2000 (Buersmeyer) 4 Goal: Improve factory efficiency by anticipating customer demand; funnel data on consumer preferences to vehicle designers Marketing How: Team up with Yahoo!, Carpoint, iVillage, and bolt.com to monitor the interests and buying patterns of web-surfing customers Strategic Partner: Microsoft Recent Developments

5. SC Word 2000 (Buersmeyer) 5 Goal: Improve service with 24-hour access; gather data on customer problems and cut costs with automated help Customer Service How: Consolidate and upgrade customer call centers worldwide; enable owners to get online help, manage warranty service through OwnerConnection web site Strategic Partner: Teletech Recent Developments

6. SC Word 2000 (Buersmeyer) 6 Goal: Make Ford the carmaker for an internet-savvy generation; collect revenue through fee-based services Digital Dashboard How: Equip new cars with web access, satellite phone services, and e-mail capabilities Strategic Partner: Sprint Recent Developments

7. SC Word 2000 (Buersmeyer) 7 Goal: Make the workforce web-literate so that it can learn to identify and leverage full potential of e-business How: Offering all 350,000 employees (hourly and salary) a computer, printer, and net access for $5 per month Strategic Partner: PeoplePC, HP Recent Developments Wired Workers

8. SC Word 2000 (Buersmeyer) 8 Goal: Automate procurement function and combine the leverage of multiple OEMs and suppliers; eliminate waste throughout supply chain Suppliers How: Launch auto-xchange (now Newco) e-marketplace with GM, DaimlerChrysler, and key tier 1 suppliers Strategic Partners: Oracle, Commerce 1, Cisco Recent Developments

9. SC Word 2000 (Buersmeyer) 9 Auto-Xchange/Newco Overview Commitment to deliver all software, hardware and implementation services to launch Auto-Xchange Auto-Xchange Operating Principles Create a market open to the entire industry, including other OEMs, all tiers of suppliers, and dealer networks Create a market open to the entire industry, including other OEMs, all tiers of suppliers, and dealer networks Operate independently and without bias, with initial guidance from Ford and Oracle Operate independently and without bias, with initial guidance from Ford and Oracle Auto-Xchange Operating Principles Create a market open to the entire industry, including other OEMs, all tiers of suppliers, and dealer networks Create a market open to the entire industry, including other OEMs, all tiers of suppliers, and dealer networks Operate independently and without bias, with initial guidance from Ford and Oracle Operate independently and without bias, with initial guidance from Ford and Oracle AUTO-XCHANGE Commitment to deliver production and non-production purchases through Auto-Xchange

10. SC Word 2000 (Buersmeyer) 10 Key Elements of Auto-Xchange AUTO-XCHANGE Visibility across supply chain Visibility across supply chain Collaboration Collaboration Optimized inventory management Optimized inventory management Visibility across supply chain Visibility across supply chain Collaboration Collaboration Optimized inventory management Optimized inventory management Multi-tier, Integrated Ford Supply Chain E-enabled Platform for Traditional Procurement Multiple Vertical Trading Communities Real time bidding On-line RFQs Internet based transactions Real time bidding On-line RFQs Internet based transactions Consortium buying Consortium buying Liquid market for surplus materials Liquid market for surplus materials Spot market for commodities Spot market for commodities Consortium buying Consortium buying Liquid market for surplus materials Liquid market for surplus materials Spot market for commodities Spot market for commodities

11. SC Word 2000 (Buersmeyer) 11 Link to Ford’s Corporate Strategy Move from company push to consumer pull Become the Dell Computer / Cisco of the automotive industry “Put the consumer in control”

12. SC Word 2000 (Buersmeyer) 12 Company Push Moving to a Consumer-driven Company Vehicle Design Marketing Please everyone Please everyone More is better More is better Pricing strategy is budget-based Pricing strategy is budget-based Use incentives to balance Use incentives to balance supply and demand supply and demand Manufacturing and Supply Dealer Network Keep the plants running Keep the plants running Capacity constraints driven Capacity constraints driven by program budgets by program budgets Sell from dealer inventory Sell from dealer inventory

13. SC Word 2000 (Buersmeyer) 13 Moving to a Consumer-driven Company Consumer Pull Vehicle Design Marketing Hit the sweet spot Hit the sweet spot 95/5 rule 95/5 rule Pricing is market-driven Pricing is market-driven Brand is paramount Brand is paramount Manufacturing and Supply Dealer Network Build to schedule Build to schedule Supply chain capacitized Supply chain capacitized based on consumer demand based on consumer demand Sell from pipeline based Sell from pipeline based on consumer demand on consumer demand

14. SC Word 2000 (Buersmeyer) 14 Key Challenges Asset intensity Franchise laws Workforce Complexity of the undertaking -- all elements are linked together

15. SC Word 2000 (Buersmeyer) 15 Q & A