Company Name: Ford Motor Co. (Joanette)
Public Availability Date: March 7, 2005

Document Sections:

INQUIRY LETTER
APPENDIX
STAFF REPLY LETTER

January 13, 2005

Securities and Exchange Commission
Division of Corporation Finance
Office of the Chief Counsel
450 Fifth Street, N.W.
Washington, D.C. 20549

Re: Omission of Shareholder Proposal Submitted by Mr. Samuel N. Joanette

Ladies and Gentlemen:

Pursuant to Rule 14a-8(j) promulgated under the Securities Exchange Act of 1934, as amended (the "Act"), Ford Motor Company ("Ford" or the "Company") respectfully requests the concurrence of the staff of the Division of Corporation Finance (the "Staff") of the Securities and Exchange Commission (the "Commission") that it will not recommend any enforcement action to the Commission if the shareholder proposal described below is omitted from Ford's proxy statement and form of proxy for the Company's 2005 Annual Meeting of Shareholders (the "Proxy Materials"). The Company's Annual Meeting of Shareholders is scheduled for May 12, 2005.

Mr. Samuel N. Joanette, a shareholder of Ford (the "Proponent"), has submitted for inclusion in the 2005 Proxy Materials a proposal and supporting statement directing the Chairman, the Board and "company officials" to adopt a mission statement pledging to achieve Best-In-Class world-class performance throughout all of the Company's worldwide operations (the "Proposal;" see Exhibit 1). The Company proposes to omit the Proposal from its 2005 Proxy Materials for the following reasons:

The Proposal is excludable under Rule 14a-8(i)(7) because it deals with matters relating to the Company's ordinary business operations.

The Proposal is excludable under Rule 14a-8(i)(10) because the Company has substantially implemented the Proposal.

The Proposal Deals with Matters Relating to the Company's Ordinary Business Operations

Rule 14a-8(i)(7) permits a company to omit a proposal if it deals with a matter relating to the company's ordinary business operations. In Exchange Act Release No. 34-40018 (May 21, 1998), the Commission stated:

The policy underlying the ordinary business exclusion rests on two central considerations. The first relates to the subject matter of the proposal. Certain tasks are so fundamental to management's ability to run a company on a day-to-day basis that they could not, as a practical matter, be subject to direct shareholder oversight.

***

However, proposals relating to such matters but focusing on sufficiently significant social policy issues (e.g., significant discrimination matters) generally would not be considered to be excludable, because the proposals would transcend the day-to-day business matters and raise policy issues so significant that it would be appropriate for a shareholder to vote.

The second consideration relates to the degree to which the proposal seeks to "micro-manage" the company by probing too deeply into matters of a complex nature upon which shareholders, as a group, would not be in a position to make an informed judgment.

Ford is in the business of manufacturing, selling, and financing automobiles. The Company can only be successful, and thus ensure its long-term sustainability, if it is competitive in all of its operations. The Proposal would require the Company to adopt a mission statement pledging to achieve Best-In-Class ("BIC") world-class performance throughout all of the Company's worldwide operations. It goes on further to state that "[d]esign, Engineering, Manufacturing, Purchasing, Finance, Sales, Marketing, Ford Credit and all subsidiaries must become BIC in all areas of their responsibility," and would mandate that the Board deliver to the shareholders a report on "BIC financial performance results and progress...."

Each of the operations cited by the Proponent is core to the everyday business operations of the Company. Each and every day, the management of Ford dedicate their efforts to ensuring that their operations meet or beat the competition. The Board of Directors of Ford regularly monitors the performance of the Company against its competition. It is axiomatic that if the Company is successful in meeting or beating the competition it will have achieved "best-in-class" performance. Thus, the Proposal attempts to interject shareholder participation into matters that clearly involve the day-to-day operation of the Company's business. This is just the type of micro-management by shareholders that Rule 14a-8(i)(7) was meant to prevent. See Ford Motor Company (March 2, 2004); Duke Power Company (March 7, 1988); Carolina Power & Light Co. (March 30, 1988); Pacific Telesis Group (February 21, 1990); and E.I. DuPont de Nemours and Company (March 8, 1991).

The Proposal clearly concerns matters related to the ordinary business of the Company - manufacturing, selling, and financing automobiles. Moreover, the Proposal implicates no social or other policy issue that could mandate its inclusion in the Proxy Materials. Thus, the Company respectfully submits that the Proposal may be omitted from Ford's Proxy Materials under Rule 14a-8(i)(7).

The Company has Substantially Implemented the Proposal

Under Rule 14a-8(i)(10), a company may exclude a proposal if the company is already doingor substantially doingwhat the proposal seeks to achieve. The purpose of the exclusion is to "avoid the possibility of shareholders having to consider matters, which have been favorably acted upon by the management" or the board of directors and thereby avoid confusing shareholders or wasting corporate resources on a matter that is moot. SEC Release No. 34-12598 (July 7, 1976). To be moot, the proposal need not require exact correspondence between the actions sought by a proponent and the company's actions in order for the proposal to be excluded. Rather, the standard is whether a company's particular policies, practices, and procedures compare favorably with the guidelines of the proposal. See Exchange Act Release No. 20091 (August 16, 1983).

As noted, shareholder proposals are considered substantially implemented within the meaning of Rule 14a-8(i)(10) when the company already has policies, practices, and procedures in place relating to the subject matter of the proposal or has implemented the essential objective of the proposal. As noted above, the Board and the management of the Company are dedicated to building a successful business sustainable over the long-term. That can only be done if the Company meets or beats the competition on a continuing basis. Otherwise, the Company will fail.

The Company has in place policies, practices, and procedures relating directly to the subject matter of the Proposal. These policies, practices and procedures are too numerous to recite here, but some examples should suffice to demonstrate substantial implementation of the Proposal:

The Company has adopted a "Priority Triangle" that has been widely distributed throughout Ford's operations (Exhibit II). In addition to setting forth the priorities, processes and leadership characteristics designed to permit the Company to meet or beat competition, it also sets forth a schematic of the processes that will deliver "Best In Class Results" in vehicle Quality, Sales and Service Satisfaction and Elimination of Wastesome of the very areas proposed to be covered by the Proposal.

The Company's Manufacturing Operations (another discipline cited in the Proposal), has established and published on the Company's Intranet website "Best Practices" to be followed, with additional data and information contained in links from the home page (Exhibit III).

In the Product Development area (another discipline cited in the Proposal, i.e., Design and Engineering), the Company's Intranet set's forth the Product Development mission: "Deliver Dependable and Exciting Products that are World Class in Cost, Quality, Function, and Time to Market that our Customers and Employees Delight in, by executing consistently well using common Global Standards, Methods and Processes with rigour and discipline." (Emphasis added.)(See Exhibit IV.)

Each of the other disciplines within the Company can be expected to have adopted a similar mission to be "Best In Class."

Moreover, the Company has already substantially implemented the Proposal's request to report "BIC financial performance results and progress to shareholders," including sales, revenue, profits, earnings-per-share, value added, etc. Recognizing again the Commissions position that for a proposal to be moot it need not require exact correspondence between the actions sought by a proponent and the company's actions, the Company has substantially implemented the Proposal. The amount of reporting the Company does to its shareholders and the public is too voluminous to cite here, but again some examples should be sufficient to demonstrate substantial implementation:

The Company's periodic reports with the SEC on Form 10-Q, annual report on Form 10-K, and other reports on Form 8-K set forth on a regularized basis and in great detail much of the information requested by the Proponent. Those reports contain detailed data on world-wide product sales, profits, earnings-per-share, market share, cost performance, warranty performance, annual stock price performance and dividend payout, which encompass most of the areas the Proposal would require be included in the report. In addition, the Management Discussion and Analysis section of those reports provides additional information on how Company management views the state of the business.

Much of the information and data contained in the Company's SEC reports is also contained in the Company's Annual Report delivered to shareholders each year.

Throughout the year, the Company has numerous press conferences, web-casts, press releases, etc., that detail the Company's financial performance and progress against objectives.

Consequently, the Company respectfully submits that the Proposal may be omitted from Ford's Proxy Materials under Rule 14a-8(i)(10).

Conclusion

For the foregoing reasons, it is respectfully submitted that the Proposal may be excluded from Ford's 2005 Proxy Materials. Your confirmation that the Staff will not recommend enforcement action if the Proposal is omitted from the 2005 Proxy Materials is respectfully requested.

In accordance with Rule 14a-8(j), the Proponent is being informed of the Company's intention to omit the Proposal from its 2005 Proxy Materials by sending him a copy of this letter and its exhibits. Seven copies of this letter are enclosed. Please acknowledge receipt by stamping and returning one copy in the enclosed self-addressed stamped envelop.

If you have any questions, require further information, or wish to discuss this matter, please call Jerome Zaremba (313-337-3913) of my office or me (313-323-2130).

Very truly yours,

/s/

Peter J. Sherry, Jr.

Enclosure
Exhibits

cc: Mr. Samuel N. Joanette (via Federal Express)

Resolved:

Adoption of the following proposal of growth-oriented action will strengthen Ford's financial condition and Enhance Shareholder's Value.

Supporting Statement:

4.95%,18.1%,30.08%,38.45%,66.5% and66%. (Source: Fidelity Investments)

These negative numbers justify why shareholders should approve this proposal. They are the annual and cumulative shareholder losses in Ford Common stock 1999 through 2002 and the percentage that shareholder's dividend was cut.

Are shareholders and Ford Motor Company better off today after six years of Chairman Bill Ford's leadership than under Chairman Alex Trotman's leadership in 1998? Every financial result the past six years indicates the answer is no.

The Company's (shareholder's) cash and stock price was devastated by failed management and the careless spending of Chairman Ford and the Board of Directors (Board). Tens of billions of dollars was wasted (including $1.4 billion paid to the Ford family Class "B" shareholders through the failed VEP) by company officials (CO) with little or no return on investment. Ford's credit rating was lowered to near-junk bond level and its reputation soiled. After six years of patience, long suffering Common stock shareholders now demand world-class performance from Chairman Ford and the Board.

Since January 1999, the Chairman and Board have reneged on their once-promised objective to Enhance Shareholder's Value. In 1999 and 2000 (see Annual Reports), Chairman Ford stated he would Enhance Shareholder's Value, but failed while managing Ford's stock price from $66 to $6, and no longer mentions Enhancing Shareholder's Value. Since becoming Chairman, Bill Ford has failed to achieve nearly every stated company goal (see Annual Reports). Failures have been too many, successes too few.

For the Company to survive and shareholders (the Company's owners) to prosper, dynamic change must be implemented. Approval of this proposal will demand that Chairman Ford initiate growth-oriented actions and set concrete goals for shareholders to evaluate his and the Board's performance. Achieving this initiative will lead Ford to becoming the Number 1 world-class automobile manufacturer.

Enhancing Shareholder's Value must be reinstated and Chairman Ford keep his 1999/2000 promise to shareholders.

Please vote "FOR" this proposal.

PROPOSAL:

The Chairman, Board and CO are directed to adopt a mission statement pledging to shareholders to achieve Best-In-Class (BIC) world-class performance throughout all of the company's worldwide operations. This BIC mission will be accomplished within 5 years and maintained every year thereafter.

Design, Engineering, Manufacturing, Purchasing, Finance, Sales, Marketing, Ford Credit and all subsidiaries must become BIC in all areas of their responsibility.

The Board will be responsible and accountable annually to deliver and report (in the Annual Report) BIC financial performance results and progress to shareholders. BIC includes every measurable facet of world-wide operations and finance - world-wide product sales, revenue, profits, EPS, Value-added, market share, cost reduction/containment, productivity, warranty and BIC (vs. automotive companies) annual stock price performance and dividend pay out.

Measurable BIC performance must be achieved each year leading up to the fifth year.

March 7, 2005

Response of the Office of Chief Counsel Division of Corporation Finance
Re: Ford Motor Company Incoming letter dated January 13, 2005

The proposal directs Ford to adopt a mission statement pledging to achieve "Best-In-Class" world-class performance throughout all of Ford's worldwide operations, accomplish the mission within five years, and report the financial performance results and progress annually to shareholders.

There appears to be some basis for your view that Ford may exclude the proposal under rule 14a-8(i)(7), as relating to Ford's ordinary business operations (i.e., business practices and policies). Accordingly, we will not recommend enforcement action to the Commission if Ford omits the proposal from its proxy materials in reliance on rule 14a-8(i)(7). In reaching this position, we have not found it necessary to address the alternative basis for omission upon which Ford relies.

Sincerely,

/s/

Kurt K. Murao
Attorney-Advisor