Ford 2005 Annual Report Download - page 90

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Notes to the Financial Statements
NOTE 22. EXIT AND DISPOSAL ACTIVITIES AND OTHER ACTIONS (Continued)
Financial Services Sector
Exit and disposal activities. In 2004, we announced a plan to create an integrated sales platform in the United States and
Canada over the next two years that would support sales activities for Ford Credit and our other business operating units. The plan
included the consolidation of regional sales offices and an integration of branch locations. We recognized pre-tax charges related
to the plan of $41 million in 2005 and $11 million in 2004 in Operating expenses. The integration will be completed in 2006.
The table below summarizes the pre-tax charges incurred, the related liability at December 31 and the estimated total costs for
the sales branch integration:
Segment
Liability at
December 31,
2004
Accrued in
2005
Paid in
2005 Other
Liability at
December 31,
2005
Estimated
Total Costs
Ford Credit ............................................................................................ $ 10 $ 41 $ (36) $ — $ 15 $ 61
Other Employee Separation Actions. In 2005, we completed various separation programs for Ford Credit salaried employees in
connection with reorganization and efficiency actions. We recognized pre-tax charges of $36 million in 2005 as a result of these
actions (excluding costs for retirement plan and postretirement health care and life insurance benefits).
NOTE 23. RETIREMENT BENEFITS
Employee Retirement and Savings Plans
We have two principal qualified defined benefit retirement plans in the United States. The Ford-UAW Retirement Plan covers
hourly employees represented by the UAW, and the General Retirement Plan covers substantially all other Ford employees in the
United States hired on or before December 31, 2003. The hourly plan provides noncontributory benefits related to employee
service. The salaried plan provides similar noncontributory benefits and contributory benefits related to pay and service. Other
U.S. and non-U.S. subsidiaries have separate plans that generally provide similar types of benefits for their employees. We
established, effective January 1, 2004, a defined contribution plan generally covering new salaried U.S. employees hired on or
after that date. Ford-UAW Retirement Plan expense accruals for UAW-represented Ford employees previously assigned to
Visteon Corporation ("Visteon Hourly Employees") were charged to Visteon Corporation ("Visteon"). Pursuant to definitive
agreements with Visteon signed on September 12, 2005, these charges were discontinued effective October 1, 2005.
For our plans that provide benefits based on salary, we project employee future salary growth for such salary-related benefits.
Certain of our defined benefit pension plans provide benefits that are not based on salary (e.g., U.S. Ford-UAW Retirement Plan,
noncontributory portion of the U.S. General Retirement Plan, and Canada Ford-UAW Retirement Plan). The salary growth
assumption is not applicable to these benefits.
Plan obligations and costs are based on existing retirement plan provisions. No assumption is made regarding any potential
future changes to benefit provisions beyond those to which we are presently committed (e.g., in existing labor contracts).
In general, our plans are funded, with the main exceptions of certain plans in Germany and U.S. defined benefit plans for
senior management. In such cases, an unfunded liability is recorded.
The expense for our worldwide defined contribution plans was $83 million in 2005, $80 million in 2004 and $37 million in
2003. This includes the expense for company matching contributions to our primary savings plans (United States and Canada) of
$44 million in 2005, $40 million in 2004 and $0 million in 2003. The 2004 increase in savings plan expense was due to
reinstatement of company matching contribution on salaried employee contributions in the United States and Canada. The
company match was suspended again in July 2005.
Ford Motor Company Annual Report 2005 88 Ford Motor Company Annual Report 2005 89