UAW-Ford Hourly Retirees, Surviving Spouses and their Eligible

Dependents Identified as "General" Retirees and Surviving Spouses

Subject: Pension Benefit Changes Effective October 1, 2007, Health Care Changes Effective January 1, 2008, and the Retiree Health Care / VEBA Trust.

The new 2007 Collective Bargaining Agreement provides for benefit increases, including increases in Life Income Benefit, Temporary Benefit, the Interim Supplement, Early Retirement "30-and-Out" Benefit and Special Survivor Benefit. Effective October 1, 2007, the Life Income Benefit, Temporary Benefit, the Interim Supplement, Early Retirement "30-and-Out" Benefit, and Special Survivor Benefit will be increased. Additionally, a retiree lump sum payment will be paid in December 2007, 2008, 2009 and 2010. The December 2007 lump sum of $700 was paid to eligible retirees who retired prior to October 1, 2007, and who are receiving benefits on December 1, 2007.

The health care Settlement Agreement, implemented August 1, 2006, provides for certain modifications to health care coverage, including increases in certain dollar-denominated health care cost sharing amounts no greater than 3% per year. Health care monthly premiums and certain mail order drug co-payments will increase by 3% (with appropriate rounding). In addition, the deductibles, emergency room co-payments and out-of-pocket maximums also will increase by 3% (with appropriate rounding) for the Modified Ford (National PPO, all PPOs, and all HMOs) and Catastrophic PPO plans. The Summary of Cost Sharing Changes, effective January 1, 2008, is included in this letter for the:

• Modified National Preferred Provider Organization (PPO), and all PPOs

• Catastrophic Health Care Plan

• Modified Health Maintenance Organizations (HMOs)

Pursuant to the Settlement Agreement, other changes may be made during the 2008 plan year (3/1/08 and later) to certain HMO benefits to achieve savings equivalent to the savings achieved by the implementation of changes to the Modified National PPO and PPO Plans. You will be notified if such changes are made.

The UAW and Ford have agreed that responsibility for providing retiree health care will permanently shift from Ford to a new retiree plan funded by a new independent VEBA trust. The agreement, which is subject to court approval, will ensure that the UAW may not negotiate to increase Ford funding or otherwise seek to obligate Ford to provide additional contributions to the VEBA, make any other payments for the purpose of providing retiree health care, or provide retiree medical benefits through any other means. The agreement covers current retirees, eligible future retirees, their spouses, surviving spouses and certain dependents as of the effective date of the 2007 contract. All new hires are excluded from the agreement. It is estimated that the VEBA trust will assume responsibilities of retiree medical benefit payments on January 1, 2010. The Company will continue to pay for retiree medical benefits until that time.

If you have any questions regarding your Health Care changes, please contact the National Employee Services Center (NESC) at 1-800-248-4444.

If you have any questions regarding your Pension Benefit Changes, please contact the Retirement Board at 1-800-829-8833

Employee Benefits

January 1, 2008 changes are BOLD and underlined below.

•$11 per month for a single contract

•$22 per month for a multiple party contract

•$159 per year for single contract

•$318 per year for multiple party

•10% of covered health care costs for in network services

•30% of covered health care costs for out-of network services

Generic $ 5 $ 7

Brand $ 11 $ 13

Erectile Dysfunction $ 16 $ 19

$53 per visit (waived if admitted to hospital)

Single $ 265 $ 530

Multiple party $ 530 $1,061

•Due to the higher deductibles and cost sharing amount required, this plan does not have monthly health care contributions

•$1,326 per year for single contract

•$2,652 per year for multiple party

•10% of covered health care costs for in network services

•30% of covered health care costs for out-of network services

Generic $ 16 $ 32

Brand $ 37 $ 74

Erectile Dysfunction $ 53 $ 106

$106 per visit (waived if admitted to hospital)

Single $2,652 $ 5,304

Multiple party $5,304 $10,609

Monthly health care contributions through pension deductions:

•$11 per month for a single contract

•$22 per month for a multiple party contract

Generic $ 5 $ 7*

Brand $ 11 $ 13*

Erectile Dysfunction $ 16 $ 19*

Note: HMO drug co-payments may vary. Not all HMO plans have mail-order programs. *Mandatory mail only.

Emergency Room Co-payment - $53 per visit (waived if admitted to hospital)

The Life Income Benefit was increased by $2 per month per year of credited service.

The Temporary Benefit was increased by $1 per month per year of credited service, to a maximum of $30 per month.

The Interim Supplement was increased by 95¢ per month per year of credited service, reduced if age at retirement was below age 60.

The 30-and-Out Supplement maximum was increased by $120.

The Special Survivor Benefit increased by $1 per month per year of credited service. Due to the complexity of these benefit changes, and to ensure the accuracy of the calculations which will be made retroactive to October 1, 2007, the estimated payment date is the end of the second quarter 2008. However, every attempt will be made to expedite these changes with Fidelity.

Payment of Supplemental Allowance or Temporary Benefits will be extended to the Social Security Primary Insurance 80% date for retirees born between 1944 and September 14, 1949.

The estimated payment date is the end of the second quarter in 2008 for affected retirees. (Retroactive back to October 1, 2007, if applicable)

The Lump Sum Payment of $700 was paid to all eligible retirees who retired prior to October 1, 2007 and who were receiving benefits on December 1, 2007.

The 2007 Lump Sum Payment was paid on December 21, 2007 to all eligible retirees and surviving spouses.

Eligible surviving spouses of retirees who retired prior to October 1, 2007 and who are in pay as of December 1, 2007 received $455. A surviving spouse who receives benefits under the Special Survivor Option of the Plan, and an eligible surviving spouse who receives a Survivor Income Benefit under the Insurance Program received a maximum of $455.

All Lump Sum Payments were paid from the Ford-UAW Retirement Plan and as such, will be reported for 2007 tax purposes on Form 1099.Future communications will describe Lump Sum Payments in 2008, 2009 and 2010.

Note:

50% of the Lump Sum Payment may be withheld from retirees with overpayments under the Life and Disability Plan. Deferred Vested and REACT spouses are not eligible.