Facility Sustainability

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1 Ford Sustainability & Environmental Policy Facility Sustainability John Viera Director, Sustainability & Vehicle Environmental Matters German American Chambers of Commerce USA & Germany: A Path to Energy Efficiency February 1, 2011

2 Facilities Sustainability Energy Use and Greenhouse Gases Facilities Related Emissions Water Use Waste Management Sustainable Land Use and Biodiversity Green Buildings

3 Mission Statement/Goals We have adopted a rigorous and holistic approach to reducing the overall environmental impacts of our manufacturing facilities. Every facility, globally, uses a detailed scorecard to report against environmental targets, so that we can track and accelerate improvements. Progress toward the targets is reviewed throughout the year by senior management and are part of the performance review metrics for every plant manager and regional manufacturing manager up to the Group Vice President of Manufacturing and Labor Affairs

4 Facility Targets Each facility must report it s progress on each of the following environmental issues: Energy use and greenhouse gases Facility-related emissions Water use Waste management Land use and bio-diversity Green buildings Compliance Remediation

5 2010 Global Scorecard Metric 2009 Target 2009 Actual Facility Energy Efficiency (global) Energy Use VOC emissions (North America) 3% improvement 8% improvement Continue use reductions 24 g/m2, or less 21 g/m2 44% improvement from 2000 Water Use (global) 6% reduction 16.6% reduction Landfill Waste (global) 10% reduction 20.6% reduction

6 Data Collection & Reporting, including consolidation of data centers across NA Energy Star Guidelines & Tools Best Practices Replication Management Involvement Projects & Actions Energy Performance Contracting Initiatives, Programs Low Cost, No Cost Best Practices Communication & Awareness Share progress with whole plant Educate plant employees Community Outreach Enablers

7 33 Manufacturing Facilities Annual Energy Costs: $600M Efficiency Improvements Energy Efficiency - Progress to Date - Global : 44% improvement (17.7% reduction per vehicle produced) Best in class energy monitoring system Received US EPA Energy Star Award 5 years in a row, and mentors other companies. Extended energy programs to operations in Canada, Mexico, Asia Pacific and South America.

8 North American Manufacturing Energy Efficiency Improvements Actions Process Tooling Flexible Manufacturing Work Cells Electric Tools Painting Processes Operations Compressed Work Schedules Non-Production Shutdown Procedures Compressed Air Leak Repair Infrastructure Upgrades Lighting Heating & Ventilating Compressed Air Management

9 North American Manufacturing Energy Efficiency Improvements Actions Flexible manufacturing, which requires less manufacturing floor space and optimizes utilization. Updated facility lighting and control systems Upgraded paint process systems greater efficiency, lower emissions and Fumes to Fuel, which turns paint fumes into electricity Advanced computer controls on all North American plant air compressors for paint shop applications and pneumatic tools PC Power Management program to improve global energy efficiency reducing the global carbon footprint by 16,000 to 25,000 metric tons. "Go Green" Dealership Sustainability Program to improve the energy efficiency of Ford and Lincoln dealerships Aggressively curtailing energy use during extended production shutdown periods Employee energy awareness communications and events, development of energy modeling and industry best practices Updated heating systems

10 U.S. Government funded program to improve air quality through superior energy efficiency Supports all sectors of energy use and generation Benefits: Industry focused best practices sharing and benchmarking Monthly Partner Webcasts Motor Vehicle Manufacturing Focus Group Benchmarking Tools (EPI) Energy Star Award (5 years in a row) EPA Energy Star Program

11 Paint Energy Efficiency Reduced Booth Air Humidity Natural gas consumption reduced by lowering booth temperature and humidity setpoints during winter at all applicable N.A. paint departments Benefits: Total Annual Energy Reduction Natural Gas: 0.6M mcf (7%) $5M savings No affect on paint quality Booth Air Handling Recirculation and cascade strategies reduce the volume of air processed Benefits: (AAI) Annual Energy Reduction Electricity 1.2MW (7%) $0.6M savings Natural Gas 40Kmcf (3%) $0.3M savings Strategy incorporated into Ford paint shop specifications.

12 Paint Energy Efficiency (cont d) Three Wet Paint Booth Energy savings through reduced paint booth footprint & consolidated processes Annual Energy Reduction Potential Electricity: 1.0MW (5%) $0.3M savings Natural Gas: 0.2M mcf (12%) $1.4M savings Fumes to Fuel Conversion of paint booth VOCs into electricity Benefits: Electricity: 3.4MW (5%) $1.5M savings Natural Gas: 1.0M mcf (16%) $8M savings Virtual elimination of NOx, SOx 10-fold reduction in CO2 emissions vs. traditional abatement Net energy production

13 Climate Change Actions Reduced global CO2 emissions by 44% and emissions per vehicle by 174% since Industry-leading Global Emissions Manager (GEM) database ensures environmental metrics such as CO2 emissions are tracked consistently around the globe. Voluntary GHG Emissions Reporting around the world: U.S. Dept. of Energy 1605(b), Mexican GHG Report, Canadian Voluntary Climate Registry, Australian GHG Challenge, Philippine GHG Report, Brazil GHG Program, China GHG Report, and The Climate Registry TCR. Mandatory CO2 Emissions Reporting: European Trading Scheme (EU-ETS) and North American Chicago Climate Exchange (CCX) CO2 Emissions Trading Experience: European Trading Scheme (EU-ETS) and North American Chicago Climate Exchange (CCX).

14 Facilities Air Emissions Ford has overachieved our 2009 target for 24 g/m 2 of VOC emissions from painting at NA Assembly plants: 21 g/m 2 Fumes to Fuel captures emissions from the painting process and uses them to generate electricity in paint shops at three of our manufacturing facilities. This process cuts down on fossil fuel use and the resulting CO2 emissions, as well as reducing emissions from our paint shops. Three wet painting is a new paint process that eliminates the need for paint to cure after the prime coat. It reduces CO2 emissions by 15 percent and volatile organic compound emissions by 10 percent.

15 Water Water use and availability have significant impact from both the environmental and social perspectives. Ford s Global Water Conservation Initiative in was started June In 2009, we signed on as a founding responder of the Carbon Disclosure Project's (CDP) Water Disclosure From 2000 to 2009, Ford's global manufacturing operations reduced water consumption by more than 62 percent, approximately 10.5 billion gallons. Plants have used the Ford proprietary Water Estimation Tool (WET) and Water Ideas to Lessen Demand (WILD) to understand water use and prioritize water reduction actions at our facilites.

16 Cleveland Casting Plant: aggressive program reduced water usage by 26.8 percent in 2008 and another 35 percent in 2009, saving more than $1.2 million in city water costs alone. Hermosillo Stamping and Assembly Plant (Mexico): Water consumption per vehicle reduced 34% since % of waste water recycled for inplant use, and local irrigation The Membrane Biological Reactor that treats the water has also been implemented at Chihuahua, Mexico, Chennai, India; and Chongqing, China Water Examples

17 Waste Global waste to landfill decreased by 20.6% from 2008 to Primarily through aggressive efforts to generate less waste and recycle more. Global hazardous waste generation reduced by 17% per vehicle from 2008 to We reduced the generation of hazardous waste in all regions from 2008 to 2009 largely through material and process changes. Ford bases its waste to landfill definitions on non-saleable waste only. We feel that this approach gives Ford a better way to publicly discuss our progress because inclusion of saleable waste (scrap metal) can potentially outweigh other waste streams.

18 Scope: Replaced existing air houses with large, networked direct-fired natural gas units at 8 plants Air movement redistributes rejection heat from process equipment, eliminating cold spots Recovery system uses waste heat from compressors to heat building air at Chicago Assembly Benefits: Annual Total Energy Reduction Electricity: 15MW (8%) $7M savings Natural Gas: 2M mcf (15%) $16M savings Water: 92MGal (5%) $0.2M savings 50% system efficiency improvement over steam Positive building pressurization improves indoor air quality Annual Maintenance Savings Labor: $3.2M Chemical treatment: $0.14M Highlighted Project: Centralized Steam Elimination

19 Highlighted Project AutoAlliance Energy Upgrades Scope: Plant infrastructure and production equipment upgrades Replacement of 12,000 light fixtures Paint booth air management Automated building and process equipment controls Benefits: Annual Energy Reduction Electricity: 2MW (10%) $1M savings Nat. Gas: 0.6M mcf (34%) $4.5M savings Water: 54kGal ( 20%) $0.3M savings Enable improved vehicle quality Improved lighting levels 30% less paint booth air flow = reduced dirt contamination

20 Highlighted Projects Commercial Properties World Headquarters Facility Upgrades Lighting upgrade, demand controlled ventilation Annual energy reduction Electricity: 0.5MW (3%) $80K savings Natural Gas: 46K mcf (30%) $230K savings 9% total utility reduction Research and Innovation Center Facility Upgrades Lighting upgrade, demand controlled ventilation, laboratory ventilation controls Annual energy reduction Electricity: 1.6MW (8%) $90K savings Natural Gas: 18K mcf (7%) $150K savings 10% total utility reduction Lighting Efficiency Actions De-lamp over-lit office areas T12 to T8 ballast upgrade Compact Fluorescent Strategy

21 Sustainable Land Use and Biodiversity Our activities have the potential to affect land use, nature and biodiversity, directly and indirectly Many of our facilities have taken steps to improve biodiversity and wildlife habitat on their lands. Wildlife habitats at many of our facilities, ranging in size from five to more than 100 acres 200 acres of Ford-owned land throughout southeast Michigan, which is adorned with sunflowers, wildflowers, prairie plants and other non-turf grass plantings, sustaining wildlife such as fox, coyotes and wild turkey. February 2010 Ford and Automotive Components Holdings donated 242 acres of coastal wetland, adding signficantly to the Detroit River International Wildlife Refuge. Our Mexican operation's civic committee is funding a communications campaign to raise awareness about the more than 150 natural protected areas in Mexico.

22 Rouge Then

23 Rouge Now

24 Green Roof - Rouge Assembly Plant, Michigan Solar Arrays Bridgend Engine Plant, England Geo-Thermal Cooling - Lima Engine Plant, Ohio Focus on Renewables Wind Power - Dagenham Diesel Centre, London Solar Arrays - Valencia Engine Plant, Spain

25 Green Buildings Ford is committed to the sustainable design of our facilities and landscapes using the basic principles of resource effectiveness, life-cycle assessment, health, safety and environmental performance. Ford is a member of the U.S. Green Building Council and a supporter of its green building rating system, known as LEED Ford promotes the use of environmentally friendly products in the operation and maintenance of its facilities, such as our "green housekeeping" program. Promote the use of environmentally friendly cleaning practices and water-based products that help to reduce the impact of facility operations on the environment.

26 Human Rights Sustainability Solutions Wind Power Wet Paint Process Rouge Living Roof

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