Memorandum of Understanding

Ford Motor Co
25 May 2005


Contact:   Media               Investment Community      Shareholder Inquiries
           Glenn Ray           Raj Modi (Equity)         1.800.555.5259 or     
           1.313.594.4410      1.313.323.8221            1.313.845.8540
           [e-mail]      [e-mail]           [e-mail]

                               Rob Moeller(Fixed Income)    
                               1.313.621.0881
                               [e-mail]

          Media Information Center
          1.800.665.1515 or
          1.313.621.0504
          [e-mail]



FORD, VISTEON SIGN MEMORANDUM OF UNDERSTANDING FOR NEW BUSINESS ARRANGEMENT


8:30 a.m. Conference Call Scheduled to Cover Agreement Specifics

•   Represents the next logical step in Ford's business plan by creating
opportunities for production material cost savings that are expected to result
in annual savings of $600 million to $700 million by the end of the decade. 

•   Protects Ford's supply of parts and components as 24 Visteon plants and
facilities transfer to a Ford-managed entity. 

•   Allows Ford to diversify its supply base, improving its ability to benefit
from competitively-priced and high-quality parts, systems, and technologies. 

•   Expected to result in special charges in the range of $450 million to $650
million in 2005; $300 to $500 million in 2005-2009 related to buy-outs for
hourly workers.
 

DEARBORN, Mich., May 25, 2005 - Ford Motor Company announced today it has signed
a Memorandum of Understanding (MOU) with its largest supplier, Visteon Corp.,
that protects the Company's supply of critical parts and components, creates
opportunities for production material cost savings, and improves its ability to
benefit from competitively-priced and high-quality parts, systems and
technologies.

The MOU proposes the transfer of 24 Visteon plants and facilities in the U.S.
and Mexico and associated assets to a new, temporary business entity to be
managed by Ford. Over time, Ford would prepare most of these transferred Visteon
operations for sale to companies with the expertise and capital to supply Ford
with parts, systems and technologies that are competitive in price and quality.
In addition, once the transaction is closed, the agreement provides Ford with
warrants to purchase up to 25 million shares of Visteon Corp. common stock at
$6.90 per share, and continued annual price reductions from Visteon through
2008.

'This agreement brings us closer to a true 'arms length' relationship with our
largest supplier,' said Don Leclair, Ford's chief financial officer and
executive vice president. 'We've accomplished this while also creating
opportunities to accelerate the improvement of our business results. Over time,
this agreement will allow us to diversify our supply base and enhance our access
to parts, systems and technologies that are competitive in price and quality.
With the United Auto Workers' continued support, many of these Visteon
operations will have the opportunity to prosper under new ownership.'

The MOU with Visteon is subject to customary approvals and conditions,
ratification by Ford-UAW hourly employees that would be affected by the proposed
agreement, and negotiation by Ford and Visteon of a definitive agreement, which
the parties are working to complete in the third quarter. The transaction is
expected to be closed by September 30.

Business Entity Details 
At the transaction's closing, 24 Visteon plants and facilities in the U.S. and
Mexico will transfer to a Ford-managed business entity. The entity's operations,
assets and liabilities will be reflected in Ford's consolidated financial
results and balance sheet.

In keeping with its temporary status, the new business entity will not have its
own employees. It will lease salaried employees from Visteon, and all hourly
UAW-Ford employees currently working in Visteon facilities. In addition, Ford is
expected to implement over time buy-outs for about 5,000 Ford-UAW hourly
employees.

Leading the new business entity as chief executive officer will be Frank E.
Macher, a 35-year veteran of the automotive industry who most recently served as
CEO and chairman of Federal-Mogul Corp., and previously as president and CEO of
the former ITT Automotive, an $8 billion global automotive supplier. He will
report to Greg Smith, Ford's executive vice president and president, The
Americas. Macher's career experience includes 30 years with Ford, including as
vice president and general manager of the Company's Automotive Components
Division, the predecessor to the current Visteon Corp. Also, Al Ver, Ford's
current vice president of Advanced and Manufacturing Engineering, has been
appointed the new business entity's president and chief operating officer. He
will report to Macher. Ver has 37 years of industry experience, including 33
years with Ford that includes significant experience with Manufacturing
operations, as well as engineering expertise in automotive components,
powertrain and vehicle assembly.

'Frank's unique leadership experience in our industry from both the manufacturer
and supplier perspectives makes him the right person to lead this operation,'
said Smith. 'Al will be focused on driving change in the areas of quality, cost
and delivery. Together, Frank and Al will make a formidable team.'

Other MOU Details:
Other significant terms of the MOU that would be part of the definitive 
agreement include:


•  Forgiveness by Ford of Visteon's remaining Ford-UAW OPEB obligation and a
portion of Visteon's salaried OPEB obligation for former Ford employees and
retirees, totaling about $800 million (of which $600 million was reserved in
2004). 
•  Payment by Ford to Visteon of up to $550 million to assist Visteon's
restructuring expenses. 
•  Extension by Ford to Visteon of a $250 million secured loan, the proceeds of
which would be used by Visteon to repay debt maturing on August 1, 2005. The
loan from Ford would be repaid by Visteon upon closing of the transaction. 
•  Provision by Visteon of certain services (e.g., information technology,
accounting, etc.) to facilitate the operation of the new business entity. 
•  Payment by Ford of $300 million for the inventory included in the transferred 
operations. 
•  Assumption by Ford or the Ford-managed business entity of certain liabilities
associated with the business including environmental and employee-related
accrued liabilities for the Ford-UAW hourly employees assigned to work at
Visteon. Other than these liabilities and the OPEB obligation mentioned above,
the MOU does not contemplate that Ford or the new entity will take on other
liabilities of the transferred businesses. However, it is expected that the
Ford-managed business entity would take over the future performance under
purchase and supply contracts associated with the transferred businesses. 
•  Acceleration of payment terms through 2006 for payments due from Ford to
Visteon for components purchased by Ford for its U.S. facilities, with a gradual
increase over time to normal payment terms by 2009. 
•  Funding by Ford of certain capital expenditures associated with Visteon's
Saline, Sheldon Road, Sandusky and Utica Plants effective with capital
expenditures incurred or committed by Visteon beginning May 1, 2005. This
funding is on the same terms as the funding previously agreed and announced by
Ford and Visteon in March for other Visteon plants and will continue until
closing of the transactions contemplated by the MOU.

Financial Impact:
The agreement is expected to result in special charges ranging from $450 million
to $650 million in 2005. In addition, there will be an estimated $300 million to
$500 million in special charges in 2005-to-2009 related to the buy-outs for
hourly workers. The new business arrangement also is expected to result in
significant material cost savings in the range of $600 million to $700 million
per year by the end of the decade; however, operating losses of about $125
million in the fourth quarter of 2005, and annual operating losses of $200
million to $300 million in 2006 are expected in addition to the special charges.

Conference Call Scheduled
The investment community and news media can hear Ford Chief Financial Officer
and Executive Vice President Don Leclair discuss today's announcement in a
conference call beginning at 8:30 a.m. ET, May 25.

The conference call may also be heard as an audio webcast at
www.shareholder.ford.com. Representatives of the investment community and news
media participating by teleconference will have the opportunity to ask questions
following the presentations.

Conference Call Access Information
May 25 at 8:30 a.m. ET
www.shareholder.ford.com


Toll Free:           1-800-659-1942 
International:       1-617-614-2710 
Passcode:            'Ford Call' 

Replays
Available through June 1
www.shareholder.ford.com


Toll Free:           1-888-286-8010 
International:       1-617-801-6888 
Passcode:            56389576 


* Plants and Facilities Transferring to Ford-Managed Business Entity

Plant/Facility                Location                 Operation 
Bellevue                      Bellevue, OH             Service Parts 
Chesterfield                  Chesterfield, MI         Interior 
Autovidrio                    Chihuahua, Mexico        Glass 
El Jarudo                     Chihuahua, Mexico        Powertrain 
Commerce Park South           Dearborn, MI             Administrative/Support 
Glass Labs                    Dearborn, MI             Glass 
Product Assurance Center      Dearborn, MI             Engineering 
Visteon Technical Center      Dearborn, MI             Engineering/Support 
Indianapolis                  Indianapolis, IN         Chassis 
Kansas City VRAP*             Kansas City, MO          Interior 
Carlite Automotive            Lebanon, TN              Glass 
Milan                         Milan, MI                Powertrain 
Monroe                        Monroe, MI               Chassis 
Nashville                     Nashville, TN            Glass 
Lamosa                        Nuevo Laredo, Mexico     Chassis/Powertrain 
VitroFlex                     Nuevo Leon, Mexico       Glass 
Sheldon Road                  Plymouth, MI             Climate Control 
Saline                        Saline, MI               Interior 
Sandusky                      Sandusky, OH             Powertrain/Lighting 
Sterling                      Sterling Heights, MI     Chassis 
Tulsa                         Tulsa, OK                Glass 
Utica                         Utica, MI                Interior/Exterior 
Rawsonville                   Ypsilanti, MI            Powertrain 
Ypsilanti                     Ypsilanti, MI            Powertrain 


*VRAP: Visteon Regional Assembly Plant

____________________________________________________________

Ford Motor Company, a global automotive industry leader based in Dearborn,
Michigan, manufactures and distributes automobiles in 200 markets across six
continents. With more than 324,000 employees worldwide, the Company's core and
affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover,
Lincoln, Mazda, Mercury and Volvo. Its automotive-related services include Ford
Motor Credit Company and The Hertz Corporation. 


                                    - # # # -

SAFE HARBOR
Statements included herein may constitute 'forward-looking statements' within
the meaning of the Private Securities Litigation Reform Act of 1995. These
statements involve a number of risks, uncertainties, and other factors that
could cause actual results to differ materially from those stated, including,
without limitation:

•  Failure of the UAW to ratify agreements allowing transfer of businesses and
other matters. 
•  Anticipated buyouts of UAW-represented hourly employees may not occur as
timely as planned. 
•  The sale or transfer of the entity businesses to other suppliers does not
occur, takes longer than anticipated, or cannot be achieved without terms that
are more onerous than assumed. 
•  During the period prior to the sale or transfer of the entity businesses,
operational difficulties may occur in those businesses due to labor strife,
change in management, or other reasons that could result in the interruption of
the supply, or deterioration in the quality, of the components provided by those
businesses. 
•  Competitive pricing from purchasers of the entity businesses may not yield
expected cost savings because operational efficiencies may not be realized,
production volumes may be lower than anticipated or other reasons.



                                ***









                      This information is provided by RNS
            The company news service from the London Stock Exchange