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Notes to the Financial Statements
Ford Motor Company | 2007 Annual Report 79
NOTE 14. VARIABLE INTEREST ENTITIES (Continued)
Automotive Sector
VIEs of which we are the primary beneficiary:
Activities with the joint ventures described below include purchasing substantially all of the joint ventures' output under
a cost-plus-margin arrangement and/or volume dependent pricing. Described below are the most significant of the VIEs
that were consolidated.
AutoAlliance International, Inc. ("AAI") is a 50/50 joint venture with Mazda in North America. AAI is engaged in the
manufacture of automobiles on behalf of Ford and Mazda, primarily for sale in North America.
Ford Otosan ("Otosan") is a joint venture in Turkey with the Koc Group of Turkey (41% partner) and public investors
(18%). Otosan is the single-source supplier of the Ford Transit Connect model, and an assembly supplier of the Ford
Transit van model, both of which we sell primarily in Europe.
Getrag Ford Transmissions GmbH ("GFT") is a 50/50 joint venture with Getrag Deutsche Venture GmbH and Co. KG.
GFT is the primary supplier of manual transmissions for use in our European vehicles.
Getrag All Wheel Drive AB is a 40/60 joint venture between Volvo Cars and Getrag Dana Holding GmbH. The joint
venture produces all-wheel-drive components.
Tekfor Cologne GmbH ("Tekfor") is a 50/50 joint venture with Neumayer Tekfor GmbH. Tekfor produces transmission
and chassis components for use in our vehicles.
Pininfarina Sverige, AB is a 40/60 joint venture between Volvo Cars and Pininfarina, S.p.A. The joint venture was
established to engineer and manufacture niche vehicles.
We also hold interests in certain Ford and/or Lincoln Mercury dealerships. At December 31, 2007, we consolidated a
portfolio of approximately 83 dealerships that are part of our Dealer Development program. The program's purpose is to
facilitate the establishment of independent franchised dealers by allowing a participating dealership to become the sole
owner of a Ford and/or Lincoln Mercury dealership corporation by purchasing equity from us using the operator's share of
dealership net profits. We supply and finance the majority of vehicles and parts to these dealerships, and the operators
have a contract to buy our equity interest over a period of time.
VIEs of which we are not the primary beneficiary:
In 2005, as part of the Hertz transaction, we provided cash-collateralized letters of credit to support the payment
obligations of Hertz Vehicle Financing, a VIE which is wholly owned by Hertz and of which we are not the primary
beneficiary. The fair value of our obligation related to these letters of credit, which will expire no later than
December 21, 2011, was approximately $18 million at December 31, 2007. For additional discussion of these letters of
credit, see Note 28.
The risks and rewards associated with our interests in joint ventures deemed to be VIEs of which we are not the
primary beneficiary are based primarily on ownership percentages. Our maximum exposure (approximately $357 million
at December 31, 2007) to any potential losses, should they occur, associated with these VIEs is limited to equity
investments.