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1.2.

2009
6reat|ng 6ompet|t|ve
Advantage |n Turbu|ent T|mes
February 2009
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ackground
0ur 0eceroer 2008 8udgel suor|ss|or ((S339) lu|| year) rad lre ra|l-||le ol a lru|l l|y.
w|lr|r a leW Wee|s, We Were r|l W|lr or-cosls lror supp||ers, vo|ure drops, ard oudgel|rg
r|sses.
Tre Jaruary 8udgel suor|ss|or ((S1.1V) lu|| year) |s accurale, oul uracceplao|e. wr||e We
oe||eve lral lre lurrover lorecasl |s correcl, We lee| lral lre ous|ress perlorrarce lor lral
|eve| ol sa|es rusl oe |rproved.
0ur goa| lor 2009 |s lo oe prol|lao|e al lre E8lT |eve|. Trere are rary a|| over lre Wor|d Wro
are prol|lao|e al lr|s |eve| ol sa|es. we W||| jo|r lre|r rar|sl
urderslard lre s|lual|or. Va|e a P|ar. Execule.
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North Amer|can Automob||e Product|on
0ur asset base supports a much h|gher bu||d.
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Env|ronment
Ar ecoror|c doWrlurr |s a prase ol lre ous|ress cyc|e |r Wr|cr lre ecorory as a Wro|e |s
|r dec||re. Tr|s prase oas|ca||y rar|s lre erd ol lre per|od ol groWlr |r lre ous|ress cyc|e.
Ecoror|c doWrlurrs are craracler|zed oy decreased |eve|s ol corsurer purcrases
(espec|a||y ol durao|e goods) ard, suosequerl|y, reduced |eve|s ol producl|or oy
ous|resses.
Tr|s ecoror|c doWrlurr car oper up opporlur|l|es. A We||-raraged corpary car rea||ze
lre opporlur|ly lo ga|r rar|el srare oy la||rg cuslorers aWay lror lre|r corpel|lors. we
car caplure lre ava||ao|e opporlur|l|es, lror ar ecoror|c doWrlurr, oy deve|op|rg a|lerrale
relrods ol do|rg ous|ress lral Were rever |rp|ererled dur|rg lre pr|or years.
Tre pr|rary goa| ol CRl |s lo surv|ve lre currerl ecoror|c doWrlurr ard lo deve|op a
|earer, rore cosl-ellecl|ve ard rore ell|c|erl operal|or. Tre secordary goa| |s lo groW lre
ous|ress ever dur|rg lr|s currerl ecoror|c doWrlurr.
Tre cra||erge ol successlu||y rav|gal|rg our ous|ress lrrougr lr|s ecoror|c
doWrlurr ||es |r lre rea||grrerl ol lre ous|ress W|lr currerl ecoror|c rea||l|es..
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Requ|red Act|ons
we W||| slay ca|r ard acl |r a ral|ora| rarrer as We relocus our allerl|or or res|z|rg CRl
lo lre currerl ecoror|c cord|l|ors.
Focus or Wral We car corlro|. 0or'l |el red|a rrelor|c aooul recess|ors ard ecoror|c
s|oWdoWr deler us lror acr|ev|rg ous|ress success. ll's a lrapl wry? 8ecause lre
cord|l|or ol lre ecorory |s oeyord our corlro|. 3urv|v|rg ecoror|c doWrlurrs requ|res a
locus or Wral We car corlro|, |.e. our re|evarl ous|ress acl|v|l|es.
TearWor|, TearWor|, TearWor|l 0or'l lry lo do loo rucr or your oWr. Corrur|cale
roresl|y ard cors|slerl|y W|lr CRl co||eagues ard |rduslry corlacls.
Negol|ale, regol|ale, ard regol|alel Tre va|ue ol a slrorg regol|al|or s|||| sel carrol oe
overslaled. Negol|al|rg oeller dea|s ard corlracls |s ar aoso|ule rusl lor rea||gr|rg ard
res|z|rg lr|s corpary lo lre currerl ecoror|c cord|l|ors.
Corserve casr. Prolecl assels. Reduce cosls. lrprove ell|c|erc|es.
0roW lre cuslorer oase.
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Essent|a| Act|v|t|es
1. 0|||gent|y work to |mprove the cash f|ow: we W||| lorecasl casr l|oW Wee||y lo ersure
lral experses ard p|arred experd|lures are |r ||re W|lr accourls rece|vao|e. Tre |ey |s lo
|roW roW lo ror|lor, prolecl, corlro|, ard pul our casr lo Wor|.
2. 6arefu||y work down our |nventor|es: Corverl excess, ooso|ele, ard s|oW-rov|rg
|rverlory |lers |rlo casr. Tre |ey |s lo reduce lre arourl ol your |rverlory W|lroul |os|rg
sa|es. Rereroer lre goa| |s 10 lurrs.
3. T|me|y co||ect|on of your accounts rece|vab|e: lrvo|c|rg |s ar |rporlarl parl ol our
casr l|oW raragererl. Tre l|rsl ru|e ol |rvo|c|rg |s lo do |l as soor as poss|o|e aller
producls are sr|pped ard/or aller serv|ces are de||vered. P|ace ar erpras|s or reduc|rg
o||||rg errors. Vosl cuslorers de|ay payrerls oecause ar |rvo|ce rad errors, ard lrerelore,
W||| rol pay url|| lrey rece|ve a correcled copy..
4. Re-focus attent|on on your ex|st|ng c||ents|customers: Trey are go|rg lo rave lre|r
rards oul lor rorey, ard We rave rore lo g|ve. Tral doesr'l rear We car'l overWre|r
lrer W|lr serv|ce ard supporl. Tre |ey |s lo do Wral |l la|es lo |eep our currerl cuslorers
|oya|.
we W||| corslarl|y pusr ourse|ves lo do lrese We||.
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Essent|a| Act|v|t|es
5. Re-negot|ate w|th our supp||ers:
A|Ways |eep your regol|al|ors or lre |eve| ol reed, say|rg lral CRl ras rev|eWed |ls cosl
slruclure ard ras delerr|red lral |l reeds lo |oWer supp||er cosls.Te|| lre supp||er lral you
va|ue lre re|al|orsr|p you rave deve|oped, oul lral you reed lo rece|ve a cosl reducl|or
|rred|ale|y. As| lrer lor a |oWer raler|a| pr|ce (rereroer lr|s ray rol oe a rel sav|rgs
Wrer We are requ|red lo g|ve slee| pr|c|rg oac| lo Ford), a |orger payrerl cyc|e,
producl|v|ly, or ever 'g|ve lo gel regol|al|ors. A|so, see |l you car ouy raler|a| lror lrer
or a cors|grrerl oas|s or ouy raler|a| lor lrer |l We rave |everage. lr relurr lor lre|r pr|ce
corcess|ors, We ray oe W||||rg lo agree lo a |org-lerr corlracl.
. 8hop for better |nsurances rates: 0el quolal|ors lror olrer |rsurarce agerls lor
corparao|e coverage lo delerr|re Wrelrer or rol your preserl |rsurarce carr|er |s
corpel|l|ve. A|so, cors|der rev|s|rg your coverage lo reduce prer|ur cosls.
Trere are oeller dea|s oul lrere; We reed lo creale lrer.
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Essent|a| Act|v|t|es
7. H|ss|on cr|t|ca| trave| and expenses: Tr|s W||| erao|e us lo corserve casr ard locus
resources or lre v|la| projecls lral W||| ra|e our P|ar. we rusl e||r|rale lre 'r|ce lo do
lror lre 'rusl do sperd|rg. KroW Wrer lo say 'No.
8. Re-eva|uate your headcount requ|rements: Tr|s |s a very cr|l|ca| area. 3a|ar|es/Wages
are a rajor scredu|e crarges, srorl-lerr |ayolls or perrarerl |ayolls ras ar |rred|ale
cosl sav|rg oerel|l. L||e rary corpar|es We rarped up r|r|rg reW erp|oyees |r lre good
l|res, or|y lo l|rd lral We are currerl|y overslalled due lo s|oW sa|es dur|rg lre ecoror|c
doWrlurr. lr lerrs ol doWr-s|z|rg lre slall, oe very carelu| rol lo reduce lo a |eve| lral
lorces you lo s||rp or cuslorer serv|ce ard qua||ly. Cors|der lre use ol parl-l|rers or lre
currerl lrerd ol oulsourc|rg cerla|r lurcl|ors lo |rdeperderl corlraclors.
we are lr|rr|rg lre lal, rol cull|rg lre rusc|e.
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Resu|ts
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Pr|or Performance and the 2009 P|an
Profit PIan EBIT F /(U) Q1 Forecast EBIT F / (U) PIan Forecast
HC Reductions HC % Reduction
Profit PIan 2009 Orig to Revised (349) Profit PIan => Forecast (4,101)
FKK Material Miss** (1,763) Clanton HC Reductions 2,543 231 (55) 176 24%
DAS Giveback (630) Matamoros -Bolts 1,267
China Gearbox Price ncrease (150) Warren HC Reductions 1,238 56 (15) 41 27%
Module Pricing ncl in '09 - 1 Part (1,200) Warren Travel 136

Warren Training 343

VA/VE 325

Lost Germany Revenue (Transit) (638)
January Results from Forecast 434
Profit Plan '09 EBT (4,101) Forecast '09 EBT 1,547

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0PERAT|0NAL 6hANCE8
E||r|raled 21 0|recl Laoor Pos|l|ors
E||r|raled 1 |ayers ol lrd|recl Laoor oelWeer
raragererl ard srop l|oor
E||r|raled 12 lrd|recl Laoor pos|l|ors
E||r|raled 11 sa|ar|ed pos|l|ors |r lre pasl lWo
years. (11 lr Feoruary 09)
T0TAL (2009} hEA060UNT RE0U6T|0N 50
Coro|re 0ua||ly ard Lear 0peral|ors
3rared 3erv|ces W|lr Vex|co
VR0 Purcras|rg
Vacr|re 8u||d
3upp||er 0eve|oprerl
Hanag|ng the 6hange
0a||y Veel|rg lo delerr|re scredu|es
ard Wr|cr ||res are rurr|rg. F|r|le
scredu||rg oy lre rour
use ol a|| raragers as lrorl ||re
superv|sors
lrcreased use ol v|sua| a|des lo rarage
oy excepl|or
Corrur|cale W|lr Vex|co lor srared
serv|ces
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Eng|neer|ng
6hanges Hade
8|rg Ye: 0ale|eeper wER3, corp||caled parl des|grs
(s|dep|eces, elc.), TcE, wor|ed c|ose|y W|lr Ford ard lre
supp||ers ol Ford parls. was parl ol Trars|l V2 des|gr lear
J|r upp|eger: Far|||ar W|lr rosl CA0 syslers (u0, Cal|a v1
& v). 8u||d|rg assero||es |r 3AP. was parl ol Trars|l V2-
des|gr lear
lar Jares: P|arl supporl lor Valaroros or a|| lecrr|ca|
|ssues re|aled lo F-Far||y. Respors|o|e lor lre Erg|reer|rg
parl ol 80s.
Nader Farrad|: lr crarge ol a|| F-Far||y CRTs', 0es|gr
FVEAs'. updal|rg ard creal|rg reW draW|rgs. was parl ol
Trars|l V2- des|gr lear
Crar||e 8r|slor: P|arl supporl lor C|arlor (FKK, 3C3, elc.)
3lrorg |r recrar|sr des|gr (Easy Erlry, |alcr recrar|sr),
lo|erarce slud|es. was parl ol Trars|l V2- des|gr lear.
Roo lr|per: Tesl lecrr|c|ar, sell|rg up ard ror|lor|rg a|| |r-
rouse lesls sucr as ||lecyc|e, lal|gue,elc. Ta||rg ard record|rg
lreep|ay ard del|ecl|or reasurererls.
0arW|r w|udy|a: Tesl coord|ralor, arrarged a|| lre lesls lral
Were oulsourced lo V0A, RC0, ard 0el|arce. 0versaW lre
lesl sel-ups, ra||rg sure everylr|rg Was accord|rg lo spec.
wrole |rlerra| lesl spec|l|cal|ors lor va||dal|or lesl|rg.
Hanag|ng the 6hange
J.8uc||ey W||| oe lra|red |r wER3 ard W||| la|e or lral
respors|o|||ly |r add|l|or lo dala raragererl & crarge
corlro|.
Corp||caled parls W||| oe des|gred oy 3.Poplar| or 0.Napau
Trars|l Was poslpored oy 1 rorlrs.
P|arl supporl lor Vex|co W||| oe srared oelWeer 3.Poplar|
ard R.Freurd.
Tre erg|reer|rg parl ol lre 80s' W||| oe rard|ed oy lre
rera|r|rg Erg|reer|rg lear.
F-Far||y CRTs' ard 0FVEAs' are a|| dore. updales lor
crarges ard add|l|ors lo lrese docurerls W||| oe perlorred
oy 3.Poplar| or R.Freurd.
P|arl supporl lor C|arlor W||| oe srared oelWeer lre
rera|r|rg Erg|reer|rg lear.
J. 0a| W||| la|e over Roo's dul|es. le W||| oe lra|red oy Ke|lr
8ergur. le W||| a|so corl|rue lre FEA Wor|.
K. 8ergur W||| la|e over 0arW|r's respors|o|||l|es. le car
a|so rur lre CRl lesl-|ao. Tr|s W||| oe |r add|l|or lo r|s
respors|o|||l|es lor Wr|l|rg lesl reporls ard la||rg care ol lre
lesl oudgel.
we rave a so||d core Tear ard lre ao|||ly lo corlracl ouls|de re|p |l reeded.
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Prototype 8hop
Crarges Vade
Josr 0a|e 3rop l|oor superv|sor. Respors|o|||l|es W|||
oe sp||l oelWeer rera|r|rg persora|.
Palr|c| P|ersor CNC racr|r|sl. N|c| Ecoror|des W|||
la|e over Palr|c|'s Wor| |oad. Ved|ur ard r|gr qly
orders W||| oe covered W|lr add. re|p ol olrer srop l|oor
erp|oyees
V|lcr Yourg prololype lecrr|c|ar. V||e Vasor W|||
la|e over V|lcr's respors|o|||l|es.
Varag|rg lre Crarge
we W||| reed lo gel sore 'or s|de lra|r|rg lor spec|l|c
sollWare app||cal|ors or|y cerla|r lerr|raled |rd|v|dua|s
rad exper|erce W|lr. (e.g. PP3R, ard lesl |ao
equ|prerl) Tre goa| |s lo cross lra|r eacr |rd|v|dua| as
rucr as poss|o|e |r order lo reacr rax. l|ex|o|||ly.
Rerole CVV supporl (e.g. Prograrr|rg ard 0T&0
|rlerprelal|or) lor C|arlor W||| oe eslao||sred lrrougr
lrequerl ard oper corrur|cal|or.
Va|rla|r|rg pos|l|ve all|lude ard r|gr |eve| rol|val|or
W|lr|r lre lear oy lo||oW|rg oper corrur|cal|or ard
|rlegral|or d|sc|p||res.
0eve|op|rg cosl sers|l|v|ly |r eacr |rd|v|dua| oy
rorlr|y 0L accourl rev|eWs ard lre v|sua||zal|or ol
lre cosl |rpacls ol lre day lo day ous|ress.
3ell|rg exarp|es oy supporl|rg eacr olrer ard olrer
deparlrerls rore W|lr lre re|p reeded lo lu|l||| ard
exceed cuslorer requ|rererls so We creale lre
rorerlur We reed lo palr lrese lougr l|res.
Ved|ocr|ly |s rol ar opl|or
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Program Hanagement
Crarges Vade:
Er|c 3ooos|ay (Prograr Varager ) re|eased or
2/12/2009.
-PV lor Ford P11 P|allorr
-PV lor Ford P13 P|allorr
-PV lor N.A. vAvE / P|pe||re Acl|v|l|es
Respors|o|e lor raragererl ard cuslorer |rlerlace
ol projecls lror 0aleWay 8 lrrougr Laurcr.
Respors|o|e lor dr|v|rg vAvE / P|pe||re process lor
Norlr Arer|ca. lr|l|aled ard updaled P|pe||re 0ela||
3reels. Varaged ard d|recled projecls requ|r|rg
cross-lurcl|ora| lear supporl lor |rp|ererlal|or.
Varag|rg lre Crarge:
3coll Rudd (Prograr Varager) lor 028, u02 ard
corl|ruous erg|reer|rg aspecls ol olrer currerl
producl|or Ford F-Far||y progrars W||| aosoro
respors|o|||l|es lor lre P11 ard P13 progrars.
Roo 8acru|a W||| corl|rue Prograr Varagererl
acl|v|l|es lor a|| ror-Ford progrars.
Roo 8acru|a W||| |ead vAvE cross-lurcl|ora| acl|v|l|es.
w||| coord|rale Wor| |oad ard scope ol vAvE projecls
oelWeer Purcras|rg 0|reclor (Tor Tocco) ard
Cuslorer 8us|ress ur|l v|ce Pres|derls.
0oa| |s lo ra|rla|r r|gr qua||ly ol cuslorer ard CRl operal|ors supporl.
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|nformat|on Techno|ogy
Crarges Vade
Jellrey var N|eu|arde Was lerr|raled.
Varag|rg lre Crarge
Jell W||| oe use or ar 'as reeded oas|s
(corlracl).
Corl|rue Wee||y lT slalus reel|rgs oelWeer
lre s|les.
lrp|ererl a Wor| order/l|c|el sysler lo
eslao||sr Wor||oad ard pr|or|l|es.
ll |s v|la| lral lre 3ervers ard 3AP supporl are adequale|y ra|rla|red.
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0ua||ty & Re||ab|||ty
Crarges Vade
Jell Jores re|eased or 13/2/2009.
Corlracl serv|ces ra|led.
V||e Carver lo la|e or 0CV ro|e |r
add|l|or lo r|s olrer respors|o|||l|es.
Jusl|r w||sor roves over lo P|arl 0ua||ly
Varag|rg lre Crarge:
C|ocr & layres lo eslao||sr scredu|e lor
supp||er, p|arl & cuslorer supporl:
3upporl lo la|e lre lo||oW|rg lorr(s):
3credu|ed ca||s ard/or weoEx reel|rgs
3credu|ed v|s|ls ard/ro weoEx reel|rgs
use CRl peop|e Wrere ever poss|o|e as opposed
lo corlracled serv|ces.
KAlZEN Everls Targeled al Producl
Exce||erce ard Zero 0elecl |aurcres.
Corslarl|y eva|uale |rpacl ol lre crarges
ard adjusl as requ|red.
'0ood erougr |sr'l.
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Purchas|ng 8upp||er 0eve|opment
Crarges Vade
3leve Russe||, 30E Varager C|arlor (Voved
lo P|arl 0ua||ly)
Jusl|r w||sor, 30E (E||r|raled)
Varag|rg lre Crarge
3upp||er 0eve|oprerl Erg|reer pos|l|or (s) ard
respors|o|||l|es W||| lrarsler lo Valaroros
3upp||er 3lep 0oWr For C|arlor W||| oe raraged
oy lre qua||ly lre deparlrerl
3upp||er Aud|ls
Cr|l|ca| 3upp||er Rev|eW ard v|s|ls
0lrer |ey respors|o|||l|es W||| oe lrarslerred lo lre
p|arls.
PPAP Approva|s W||| oe dore oy lre 0ua||ly
Erg|reer a||ocaled lo lre spec|l|ed cuslorer |r
spec|l|ed p|arl.
C|arlor 3corecards
3rorl lerr 0E (Jusl|r w||sor) W||| address
lr|s W|lr 0ua||ly 0eparlrerl
Lorg Terr, reW auloraled sysler lo oe
|rp|ererled
we W||| c|ose lre gap oelWeer 0peral|ors ard 3upp||er 0ua||ly
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HR0 uyer 6|anton
Crarges Vade
0oug Vurpry, VR0 8uyer (E||r|raled)
Varag|rg lre Crarge
0r|ve crarges lrrougr Wee||y slall
(Purcras|rg) reel|rgs
Trac| corl|ruous progress (Corl|rue us|rg
Purcras|rg 0per lssues L|sl)
3rorl Terr:
Too| Cr|o respors|o|||ly W||| la|| urder loo|
cr|o rarager
user requesls lor purcrase order
process|rg W||| go lrrougr Judy Esles W|lr
oac|-up supporl:
Lorg Terr:
Corso||dale lrrougr Vex|co ouy|rg
lurcl|or
3
rd
Parly corlraclor (0s|r|s)
3upp||er corso||dal|or
HR0 w||| be done more cost effect|ve|y.
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Trar|s