UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

(Mark One)

 X   Annual report  pursuant to Section 13 or 15(d) of the  Securities  Exchange
---  Act of 1934 (No Fee Required)

     For the fiscal year ended December 31, 2000

     or

___  Transition  report  pursuant  to  Section  13 or  15(d)  of the  Securities
     Exchange Act of 1934 (No Fee Required)

     For the transition period from _______ to _______

                          Commission file number 1-3950
                                                 ------


                               FORD MOTOR COMPANY

             (Exact name of Registrant as specified in its charter)

     Delaware                                           38-0549190
     --------                                           ----------
(State of incorporation)                    (I.R.S. employer identification no.)

 One American Road, Dearborn, Michigan                    48126
 -------------------------------------                    -----
(Address of principal executive offices)                (Zip code)

                                  313-322-3000
                                  ------------
              (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
                                                   Name of each exchange on
   Title of each class                                which registered (a)
-----------------------------------------         -----------------------------

Common Stock, par value $.01 per share             New York Stock Exchange
                                                   Pacific Coast Stock Exchange

Depositary Shares, each representing               New York Stock Exchange
1/2,000 of a share of Series B Cumulative
Preferred Stock, as described below
_______________
(a) In  addition,  shares of Common  Stock of Ford are listed on  certain  stock
exchanges Europe.

                           [Cover page 1 of 2 pages]



Securities registered pursuant to Section 12(g) of the Act:

Series B Cumulative  Preferred Stock, par value $1.00 per share,  with an annual
dividend  rate of $4,125 per share and a  liquidation  preference of $50,000 per
share.

Indicate  by check  mark  whether  the  Registrant:  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes __X__ No______

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

As of February 26, 2001,  Ford had  outstanding  1,764,198,802  shares of Common
Stock  and  70,852,076  shares  of  Class B Stock.  Based on the New York  Stock
Exchange  Composite  Transaction  closing price of the Common Stock on that date
($28.60  a  share),  the  aggregate  market  value  of  such  Common  Stock  was
$50,456,085,737.  Although  there is no  quoted  market  for our  Class B Stock,
shares of Class B Stock  may be  converted  at any time into an equal  number of
shares  of  Common  Stock  for the  purpose  of  effecting  the  sale  or  other
disposition of such shares of Common Stock. The shares of Common Stock and Class
B Stock  outstanding  at February 26, 2000 included  shares owned by persons who
may be deemed to be "affiliates" of Ford. We do not believe,  however,  that any
such person should be considered to be an affiliate.  For information concerning
ownership of outstanding Common Stock and Class B Stock, see the Proxy Statement
for Ford's Annual Meeting of Stockholders to be held on May 10, 2001 (our "Proxy
Statement"),  which is  incorporated  by reference  under  various Items of this
Report.

                       Document Incorporated by Reference*
                       -----------------------------------

     Document                                             Where Incorporated
     --------                                             ------------------

         Proxy Statement                                   Part III (Items 10,
                                                            11, 12 and 13)
__________________________
* As stated under various Items of this Report,  only certain specified portions
of such document are incorporated by reference in this Report.













                            [Cover page 2 of 2 pages]



                                     PART I

Item 1.  Business
-----------------

     Ford Motor  Company was  incorporated  in Delaware in 1919. We acquired the
business of a Michigan company,  also known as Ford Motor Company,  incorporated
in 1903 to produce and sell  automobiles  designed and engineered by Henry Ford.
We are the world's  second-largest  producer of cars and trucks combined. We and
our  subsidiaries  also  engage in other  businesses,  including  financing  and
renting vehicles and equipment.



                                    Overview


     Our business is divided into two business  sectors:  the Automotive  sector
and the  Financial  Services  sector.  We manage these  sectors as three primary
operating segments as described below.




Business Sectors        Operating Segments                 Description
----------------        ------------------                 -----------
                                                     
Automotive:
                        Automotive                         design, manufacture, sale, and service
                                                           of cars and trucks

Financial Services:
                        Ford Motor Credit Company          vehicle-related financing, leasing, and insurance

                        The Hertz Corporation              renting and leasing of cars and trucks and
                                                           renting industrial and construction
                                                           equipment, and other activities



     We provide financial  information (such as, revenues,  income,  and assets)
for each of these business sectors and operating segments in three areas of this
Report:  (1) Item 6. "Selected  Financial Data" on pages 34 through 36; (2) Item
7. "Management's  Discussion and Analysis of Financial  Condition and Results of
Operations"  on pages 37 through  46; and (3) Note 21 of our Notes to  Financial
Statements located at the end of this Report (pages FS-30 and FS-31).  Financial
information  relating  to  certain  geographic  areas  is also  included  in the
above-mentioned areas of this Report.



Item 1.  Business (Continued)
                                Automotive Sector


     We sell cars and trucks  throughout the world. In 2000, we sold 7.4 million
vehicles  throughout  the world.  Our  automotive  vehicle  brands include Ford,
Mercury,  Lincoln,  Volvo,  Jaguar,  Land  Rover,  Aston  Martin and  TH!NK.  In
addition,  we own 33.4% of Mazda Motor Corporation  ("Mazda").  We completed the
purchase of the Land Rover  worldwide  sport  utility  vehicle  business  ("Land
Rover") from the BMW Group on June 30, 2000.  As a result,  our 2000 results and
financial  condition include Land Rover's results and financial  condition since
the date of the acquisition.  In addition,  on June 28, 2000, we distributed 130
million  shares of  Visteon  Corporation  (our  former  automotive  systems  and
components division), which represented our 100% ownership interest, by means of
a tax-free  spin-off in the form of a dividend on Ford Common and Class B Stock.
For the  first  half of  2000,  Visteon  is  included  in  Ford's  results  as a
discontinued  operation.  Beginning  with the third quarter of 2000,  Visteon is
excluded completely from our results and financial condition.

     The worldwide automotive industry, Ford included, is affected significantly
by a number of factors  over which we have  little  control,  including  general
economic  conditions.  In  the  United  States,  the  automotive  industry  is a
highly-competitive,  cyclical  business  that  has a  wide  variety  of  product
offerings.  The  number  of cars and  trucks  sold to  retail  buyers  (commonly
referred to as "industry  demand") can vary  substantially from year to year. In
any year,  industry demand depends largely on general economic  conditions,  the
cost of purchasing and operating cars and trucks,  and the availability and cost
of credit and fuel.  Industry demand also reflects the fact that cars and trucks
are durable items that people can wait to replace.

     The  automotive  industry  outside of the United  States  consists  of many
producers,  with no single dominant producer.  Certain  manufacturers,  however,
account for the major  percentage  of total sales within  particular  countries,
especially their countries of origin. Most of the factors that affect the United
States  automotive  industry and its sales volumes and profitability are equally
relevant outside the United States.

     The  worldwide  automotive  industry  also is affected  significantly  by a
substantial amount of costly governmental  regulation.  In the United States and
Europe, for example, governmental regulation has arisen primarily out of concern
for the environment,  for greater vehicle safety, and for improved fuel economy.
Many governments  also regulate local content and/or impose import  requirements
as a means of creating jobs, protecting domestic producers, or influencing their
balance of payments.

     Our unit sales vary with the level of total  industry  demand and our share
of that industry  demand.  Our share is  influenced by how our products  compare
with  those  offered by other  manufacturers  based on many  factors,  including
design,  driveability,  price,  quality,  reliability,  safety, and utility. Our
share  also  is  affected  by  our  timing  of  new  model   introductions   and
manufacturing  capacity  limitations.  Our ability to satisfy changing  consumer
preferences  with  respect  to  type  or size of  vehicle  and  its  design  and
performance characteristics can impact our sales and earnings significantly.

                                       2


Item 1.  Business (Continued)


     The  profitability of vehicle sales is affected by many factors,  including
     the following:

     o unit sales volume
     o the mix of vehicles and options sold
     o the margin of profit on each vehicle sold
     o the level of "incentives" (price discounts) and other marketing costs
     o the costs for customer  warranty  claims and other customer  satisfaction
       actions
     o the costs  for  government-mandated  safety,  emission  and fuel  economy
       technology and equipment
     o the ability to manage costs
     o the ability to recover cost increases through higher prices

Further,  because the automotive industry is capital intensive, it operates with
a relatively high percentage of fixed costs  (including  relatively  fixed labor
costs),  which can result in large  changes in earnings  from  relatively  small
changes in unit volume.

     Following  is a  discussion  of the  automotive  industry in the  principal
markets  where we compete,  as well as a discussion of our  Automotive  Consumer
Services Group and our ConsumerConnect e-commerce initiatives and strategy:

United States
-------------

     Sales  Data.  The  following  table shows U.S.  industry  sales of cars and
trucks for the years indicated:


                                                                        U. S. Industry Sales
                                                                         (millions of units)
                                                                      Years Ended December 31,
                                                  ------------------------------------------------------------------
                                                    2000          1999          1998          1997          1996
                                                  ---------     ---------     ----------    ---------     ----------
                                                                                               
Cars........................................          8.8           8.7           8.2           8.3           8.6
Trucks......................................          9.0           8.7           7.8           7.2           6.9
                                                     ----          ----          ----          ----          ----
Total.......................................         17.8          17.4          16.0          15.5          15.5
                                                     ====          ====          ====          ====          ====



                                       3


Item 1.  Business (Continued)


     We classify cars by small,  middle, large and luxury segments and trucks by
compact   pickup,   compact   bus/van/utility,   full-size   pickup,   full-size
bus/van/utility and medium/heavy segments. The large and luxury car segments and
the compact  bus/van/utility,  full-size  pickup and  full-size  bus/van/utility
truck segments  include the industry's most profitable  vehicle lines.  The term
"bus" as used in this  discussion  refers to vans designed to carry  passengers.
The  following  tables show the  proportion  of United States car and truck unit
sales by segment for the industry  (including  Japanese and other  foreign-based
manufacturers) and Ford for the years indicated:



                                                               U. S. Industry Vehicle Sales by Segment
                                                  ------------------------------------------------------------------
                                                                      Years Ended December 31,
                                                  ------------------------------------------------------------------
                                                    2000          1999          1998          1997          1996
                                                  ---------     ---------     ----------    ---------     ----------
                                                                                             
CARS
Small.......................................         16.7%         16.1%         16.9%         18.1%         19.1%
Middle......................................         23.0          23.7          23.6          24.7          25.6
Large.......................................          2.7           3.0           3.4           3.9           3.9
Luxury......................................          7.3           7.1           7.1           6.7           6.7
                                                    -----         -----         -----         -----         -----
Total U.S. Industry Car Sales...............         49.7          49.9          51.0          53.4          55.3
                                                    =====         =====         =====         =====         =====

TRUCKS
Compact Pickup..............................          5.9%          6.2%          6.7%          6.4%          6.2%
Compact Bus/Van/Utility.....................         23.2          22.1          21.1          20.0          19.0
Full-Size Pickup............................         12.4          12.7          12.4          12.0          12.6
Full-Size Bus/Van/Utility...................          6.6           6.5           6.5           6.1           5.0
Medium/Heavy................................          2.2           2.6           2.3           2.1           1.9
                                                    -----         -----        ------         -----         -----
Total U.S. Industry Truck Sales.............         50.3          50.1          49.0          46.6          44.7
                                                    -----         -----         -----         -----         -----

Total U.S. Industry Vehicle Sales...........        100.0%        100.0%        100.0%        100.0%        100.0%
                                                    =====         =====         =====         =====         =====




                                                                Ford Vehicle Sales by Segment in U.S.
                                                  ------------------------------------------------------------------
                                                                      Years Ended December 31,
                                                  ------------------------------------------------------------------
                                                    2000          1999          1998          1997          1996
                                                  ---------     ---------     ----------    ---------     ----------
                                                                                             
CARS
Small.......................................         14.5%         13.5%         13.1%         12.7%         13.4%
Middle......................................         13.9          15.7          16.7          19.6          22.1
Large.......................................          5.1           5.7           5.7           5.6           5.3
Luxury......................................          6.6           6.0           4.2           4.1           4.1
                                                    -----         -----         -----         -----         -----
Total Ford U.S. Car Sales...................         40.1          40.9          39.7          42.0          44.9
                                                    -----         -----         -----         -----         -----

TRUCKS
Compact Pickup..............................          7.9%          8.4%          8.4%          7.7%          7.4%
Compact Bus/Van/Utility.....................         19.1          17.7          18.1          18.9          20.0
Full-Size Pickup............................         20.9          20.9          21.3          19.3          20.0
Full-Size Bus/Van/Utility...................         11.7          11.8          12.1          11.0           6.6
Medium/Heavy*...............................          0.3           0.3           0.4           1.1           1.1
                                                    -----         -----         -----         -----         -----
Total Ford U.S. Truck Sales.................         59.9          59.1          60.3          58.0          55.1
                                                    -----         -----         -----         -----         -----

Total Ford U.S. Vehicle Sales...............        100.0%        100.0%        100.0%        100.0%        100.0%
                                                    =====         =====         =====         =====         =====

------------------------------
*In 1997 Ford sold its heavy truck businesses in North America and Australia/New
Zealand to Freightliner  Corporation.  Ford ceased production of heavy trucks in
North  America  in  December  1997.  The  transfer  of the  North  American  and
Australian heavy truck businesses was completed in 1998.

     As shown in the tables  above,  since 1996 there has been a shift from cars
to trucks for both industry sales and Ford sales. Ford's sales of the middle car
segment  as a  percentage  of its  total  sales has  deteriorated  more than the
general   decline  of  the  industry  sales  in  that  segment  because  of  the
discontinuance   of  certain  product  offerings  in  the  segment  (e.g.,  Ford
Thunderbird and Contour and Mercury Mystique).

                                       4


Item 1.  Business (Continued)


     Market  Share Data.  The  following  tables  show  changes in car and truck
United  States market shares of the six leading  vehicle  manufacturers  for the
years indicated:




                                                                       U.S. Car Market Shares*
                                                  ------------------------------------------------------------------
                                                                      Years Ended December 31,
                                                  ------------------------------------------------------------------
                                                    2000          1999          1998          1997          1996
                                                  ---------     ---------     ----------    ---------     ----------
                                                                                             
   Ford**...................................         19.1%         19.9%         20.4%         20.8%         21.6%
   General Motors...........................         28.6          29.3          29.8          32.2          32.3
   DaimlerChrysler***.......................          9.1          10.3           10.7          10.2          10.9
   Toyota...................................         11.0          10.2          10.6           9.9           9.3
   Honda....................................         10.0           9.8          10.6          10.0           9.2
   Nissan...................................          4.8           4.6           5.0           5.7           5.9
   All Other****............................         17.4          15.9          12.9          11.2          10.8
                                                    -----         -----         -----         -----         -----
      Total U.S. Car Retail Deliveries              100.0%        100.0%        100.0%        100.0%        100.0%
                                                    =====         =====         =====         =====         =====



                                                                      U.S. Truck Market Shares*
                                                  ------------------------------------------------------------------
                                                                      Years Ended December 31,
                                                  ------------------------------------------------------------------
                                                    2000          1999          1998          1997          1996
                                                  ---------     ---------     ----------    ---------     ----------
                                                                                             
   Ford**...................................         28.3%         28.6%         30.5%         31.4%         31.4%
   General Motors...........................         27.0          27.8          27.5          28.8          29.0
   DaimlerChrysler***.......................         21.5          22.2          23.2          21.9          23.4
   Toyota...................................          7.2           6.7           6.3           5.7           5.3
   Honda....................................          3.1           2.6           1.9           1.5           0.8
   Nissan...................................          3.7           3.2           2.7           3.6           3.6
   All Other*****...........................          9.2           8.9           7.9           7.1           6.5
                                                    -----         -----         -----         -----         -----
      Total U.S. Truck Retail Deliveries....        100.0%        100.0%        100.0%        100.0%        100.0%
                                                    =====         =====         =====         =====         =====




                                                             U.S. Combined Car and Truck Market Shares*
                                                  ------------------------------------------------------------------
                                                                      Years Ended December 31,
                                                  ------------------------------------------------------------------
                                                    2000          1999          1998          1997          1996
                                                  ---------     ---------     ----------    ---------     ----------
                                                                                             
   Ford**...................................         23.7%         24.3%         25.3%         25.8%         25.9%
   General Motors...........................         27.8          28.5          28.7          30.6          30.8
   DaimlerChrysler***.......................         15.3          16.3          16.8          15.6          16.5
   Toyota...................................          9.1           8.5           8.5           7.9           7.5
   Honda....................................          6.6           6.2           6.3           6.0           5.5
   Nissan...................................          4.3           3.9           3.9           4.7           4.8
   All Other****............................         13.2          12.3          10.5           9.4           9.0
                                                    -----         -----         -----         -----         -----
      Total U.S. Car and Truck Retail Deliveries    100.0%        100.0%        100.0%        100.0%        100.0%
                                                    =====         =====         =====         =====         =====


__________________________
*    All U.S. retail sales data are based on publicly available information from
     the media and trade publications.
**   Ford purchased Volvo Car on March 31, 1999 and Land Rover on June 30, 2000.
     The  figures  shown  here  include  Volvo Car and Land Rover on a pro forma
     basis for the periods prior to their acquisition by Ford. During the period
     from 1996 through 1998,  Volvo Car  represented no more than 1.2 percentage
     points of total market  share  during any one year.  During the period 1996
     through 1999, Land Rover  represented no more than 0.4 percentage points of
     total market share during any one year.
***  Chrysler  and  Daimler-Benz  merged in late 1998.  The  figures  shown here
     combine  Chrysler and  Daimler-Benz  (excluding  Freightliner  and Sterling
     Heavy Trucks) on a pro forma basis for the periods prior to their merger.
**** "All  Other"  includes  primarily   companies  based  in  various  European
     countries, Korea and other Japanese manufacturers. The increase in combined
     market share shown for "All Others" reflects primarily  increases in market
     share for the Korean manufacturers.
*****"All  Other" in the U.S.  Truck  Market  Shares  table  includes  primarily
     companies  based in various  European  countries,  Korea and other Japanese
     manufacturers. The increase in combined market share shown for "All Others"
     in this table  reflects  primarily  increases in market share for Mazda and
     Mitsubishi.

     The decline in car market share for Ford in 2000 is primarily the result of
the  discontinuance of the Contour and Mystique  products.  The decline in truck
market  share for Ford  since 1997 is  primarily  the result of recent new truck
offerings  by  competitors  and  capacity  constraints  with  respect to certain
components due to stong demand.

     Marketing  Incentives and Fleet Sales.  Automotive  manufacturers that sell
vehicles in the United States typically give purchasers price discounts or other
marketing  incentives.  These  incentives are the result of competition from new
product offerings by manufacturers and the desire to maintain  production levels
and market  shares.  Manufacturers  provide these  incentives to both retail and
fleet customers (fleet

                                       5


Item 1.  Business (Continued)


customers  include daily rental companies,  commercial fleet customers,  leasing
companies and  governments).  Marketing  incentives  generally are higher during
periods of economic  downturns,  when excess  capacity in the industry  tends to
increase.

     Our  marketing  costs in the United  States as a percentage  of gross sales
revenue were as follows for the  following  three  years:  11.1%  (2000),  10.6%
(1999),  and  10.4%  (1998).  These  "marketing  costs"  include  primarily  (i)
marketing  incentives on vehicles,  such as retail rebates and costs for special
financing and lease programs,  (ii) reserves for costs and/or losses  associated
with our required repurchase of certain vehicles sold to daily rental companies,
and (iii) costs for advertising and sales promotions for vehicles.  The increase
in  marketing  costs  over  the  last  several  years  is a  result  of  intense
competition in the United States market.

     Fleet sales generally are less  profitable than retail sales,  and sales to
daily rental  companies  generally are less profitable than sales to other fleet
purchasers.  The mix between  sales to daily  rental  companies  and other fleet
customers has been about evenly split in recent years. The table below shows our
fleet sales in the United States,  and the amount of those sales as a percentage
of our total United States car and truck sales, for the last five years.



                                                                          Ford Fleet Sales
                                                  ------------------------------------------------------------------
                                                                      Years Ended December 31,
                                                  ------------------------------------------------------------------
                                                    2000          1999          1998          1997          1996
                                                  ---------     ---------     ----------    ---------     ----------
                                                                                           
Units sold..................................      977,000       940,000       878,000       923,000       936,000
Percent of Ford's total U.S. car and truck sales     23%           23%           22%           24%           24%



     Warranty  Coverage.  We presently  provide warranty coverage for defects in
factory-supplied  materials and  workmanship on all vehicles  (other than medium
trucks) in the United States.  This warranty coverage for Ford/Mercury  vehicles
extends  for 36 months or 36,000  miles  (whichever  occurs  first)  and  covers
components of the vehicle,  including tires  beginning  January 1, 2001 for 2001
and later model years. Prior to January 1, 2001 tires were warranted only by the
tire  manufacturers.  The United States  warranty  coverage for luxury  vehicles
(Lincoln,  Jaguar,  Volvo, and Land Rover) extends for 48 months or 50,000 miles
(whichever occurs first) but, except for Lincoln beginning January 1, 2001, does
not include tires,  which are warranted by the tire  manufacturers.  In general,
different  warranty coverage is provided on medium/heavy  trucks and on vehicles
sold  outside  the  United  States.  In  addition,   as  discussed  below  under
"Governmental  Standards - Mobile Source Emissions  Control",  the Federal Clean
Air Act requires  warranty  coverage for a "useful  life" of 10 years or 100,000
miles  (whichever  occurs  first)  for  emissions  equipment  on most light duty
vehicles  sold in the United  States.  As a result of these  warranties  and the
increased  concern  for  customer  satisfaction,  costs  for  warranty  repairs,
emissions  equipment  repairs,  and  customer  satisfaction  actions  ("warranty
costs") can be substantial. Estimated warranty costs for each vehicle sold by us
are  accrued  at the  time of sale.  Such  accruals,  however,  are  subject  to
adjustment from time to time depending on actual experience.

Europe
------

     Outside of the United States,  Europe is our largest market for the sale of
cars and trucks.  The  automotive  industry in Europe is intensely  competitive.
Over the past year,  140 new or freshened  vehicles,  including  derivatives  of
existing   vehicles,   were   introduced  in  the  European  market  by  various
manufacturers.  For the  past 14  years,  the top six  manufacturers  have  each
achieved  a car  market  share in about  the 10% to 18%  range.  (Manufacturers'
shares,  however, vary considerably by country.) This competitive environment is
expected to intensify  further as Japanese  manufacturers,  which together had a
European car market share of 11.4% for 2000,  increase their production capacity
in Europe. We estimate that in 2000 the European  automotive industry had excess
capacity of  approximately  6 million  units (based on a comparison  of European
domestic demand and capacity).

     In 2000,  vehicle  manufacturers  sold  approximately 17.8 million cars and
trucks in Europe,  down 2% from 1999  levels.  Our combined car and truck market
share in Europe in 2000 was 10.0%, down 2/10 of one percentage point from 1999.

                                       6


Item 1.  Business (Continued)


     Britain and Germany are our most important markets within Europe,  although
the Southern  European  countries  are becoming  increasingly  significant.  Any
adverse  change in the British or German market has a significant  effect on our
total automotive profits. For 2000 compared with 1999, total industry sales were
up 1% in Britain and down 10% in Germany.

     For  purposes  of the figures  shown in this  section,  we have  considered
Europe to consist of the following 19 markets:  Britain, Germany, France, Italy,
Spain, Austria, Belgium, Ireland, Netherlands,  Portugal, Switzerland,  Finland,
Sweden, Denmark, Norway, Czech Republic, Greece, Hungary, and Poland.

Other Markets
-------------

     Mexico and Canada.  Mexico and Canada also are important markets for us. In
2000, industry sales of new cars and trucks in Mexico were approximately 886,000
units, up 28% from 1999 levels. In Canada, industry sales of new cars and trucks
in 2000 were  approximately  1.59 million  units,  up 3% from 1999  levels.  Our
combined car and truck market share in these markets in 2000 was 16.2%  (Mexico)
and 17.8% (Canada).

     South  America.  Brazil and Argentina  are our  principal  markets in South
America. The economic environment in those countries has been volatile in recent
years,  leading to large  variations in industry  sales.  Results have also been
influenced by the devaluation of the Brazilian currency, continued weak economic
conditions  and  government  actions to reduce  inflation  and public  deficits.
Industry  sales in 2000 were 1.45  million  units in  Brazil,  up about 16% from
1999, and approximately  307,000 units in Argentina,  down 19% from 1999. Brazil
shows signs of continued  economic  recovery and we expect  industry  volumes to
improve further in 2001.  Economic  conditions  remain weak in Argentina,  which
could lead to further  deterioration  of industry  volumes in 2001. Our combined
car and truck market share in these  markets in 2000 was 9.1% (Brazil) and 14.9%
(Argentina).

     Ford has undertaken  restructuring  actions in recent years to reduce costs
and improve our competitiveness in South America. In addition, we are building a
new assembly  plant in Brazil,  which will  manufacture a new family of vehicles
for the South  America  markets.  The new plant will start  building the Courier
this fall and begin producing an all-new vehicle next year.

     Asia Pacific. In the Asia Pacific region,  Australia,  Taiwan and Japan are
our principal markets.  Industry volumes in 2000 in this region were as follows:
approximately  788,000  units in  Australia  (up 0.1% from 1999),  approximately
420,000 units in Taiwan (down 1% from 1999) and approximately 6 million units in
Japan (up 1.7% from 1999).  In 2000,  our combined car and truck market share in
Australia was 15.4%. In Taiwan,  we had a combined car and truck market share in
2000 of 12.3%.  Our  combined  car and truck market share in Japan has been less
than 1% in recent years.  We own a 33.4% interest in Mazda and account for Mazda
on an equity basis.  Mazda's market share in Japan has been in the 5 to 6% range
in recent years.  Our principal  competition in the Asia Pacific region has been
the Japanese  manufacturers.  We anticipate  that the  continuing  relaxation of
import  restrictions  (including  duty  reductions) in Australia and Taiwan will
intensify competition in those markets.

     We opened a new assembly plant in India in 1999, launching an all-new small
car (the Ikon) designed  specifically  for that market.  In 2000,  approximately
17,000 Ikons were produced for sale in India. In addition,  India commenced sale
of Ikon CKD (completely knocked down) kits to Mexico and South Africa. We expect
India to become one of our most important markets in Asia in the future.

     Africa.  In recent years, we have operated in the South African market as a
45% owner in the South African Motor Corporation (Pty.) Limited  ("SAMCOR").  In
2000, we increased our  ownership  interest in SAMCOR to 100% by purchasing  the
remaining 55% we did not previously own.  Subsequent to this purchase,  SAMCOR's
name was changed to Ford Motor Company of Southern Africa ("FMCSA").

                                       7


Item 1.  Business (Continued)


     FMCSA assembles and distributes Ford, Mazda,  Mitsubishi and,  beginning in
2000,  Volvo vehicles in South Africa.  In addition,  FMCSA  distributes  Jaguar
vehicles.  In 2000,  industry volume in South Africa was  approximately  341,000
units, up 15% from 1999 levels.  FMCSA's  combined car and truck market share in
2000 was 15.5% for the five brands it distributes; the share for the Ford brands
(Ford, Mazda, Volvo and Jaguar) was 14.6%.

Automotive Consumer Services Group
----------------------------------

     Automotive  Consumer  Services  Group is a business  unit  within Ford that
includes  Ford Customer  Service  Division and an all-makes  channel,  otherwise
known as our Diversified Consumer Services  organization,  consisting of several
leading  automotive  service brands.  Ford Customer  Service  Division  supports
consumers  of Ford,  Lincoln and  Mercury  brand  vehicles  through a network of
franchised dealers. This is the principal source of vehicle service and customer
support for our vehicle owners,  traditionally  recognized by the Quality CareSM
brand.

     Through our Diversified Consumer Services organization,  vehicle owners for
all  automotive  brands can access  services in areas of  maintenance  and light
repair,   collision  repair,  extended  service  business,  and  recycling.  Our
all-makes channel of companies includes:  Kwik-Fit (maintenance and light repair
in  Europe),  Pit  Stop  (maintenance  and  light  repair  in  Europe),   Speedy
(maintenance  and light repair in Europe),  MasterGroup  (maintenance  and light
repair,  collision  repair,  and used  car  sales  outlets  in  Mexico),  B-quik
(maintenance and light repair in Thailand), Collision Team of America (collision
repair in the United  States),  Howard Basford  (collision  repair in the United
Kingdom),  Automobile Protection  Corporation (extended service business selling
all-makes  policies  through  dealers  in  the  United  States),  and  GreenLeaf
(automotive  recycling in the United States and Europe).  The characteristics of
the  Diversified  Consumer  Services  organization  align  closely with the Ford
Customer Service  Division and expand the customer base to consumers  previously
outside the Ford network of service providers.

     Automotive  Consumer  Services Group conducts business in over 40 countries
and serves consumers through over 13,000 dealer outlets and over 2,500 all-makes
outlets.

ConsumerConnect
---------------

      ConsumerConnect is a business  unit  within  Ford  dedicated  to  building
e-business  platforms across Ford which  revolutionize  core business  processes
within Ford globally and provide the consumer an enhanced purchase and ownership
experience.

     In 2000,  ConsumerConnect  was  involved in the  creation of several  joint
ventures. In the B2C (Business-to-Consumer)  arena,  ConsumerConnect established
DealerDirect LLC which conducts business under the name FordDirect.com.  This is
the first  e-commerce  joint venture between an automotive  manufacturer and its
dealer body, and it will provide consumers with an improved internet  experience
in buying and owning a Ford vehicle.  Ford owns 93% of the economic  interest in
DelaerDirect  LLC and 20% of the general  voting power.  In the Mobile  Commerce
(M-commerce) arena, ConsumerConnect launched Wingcast, LLC, a joint venture with
Qualcomm,  Incorporated dedicated to providing wireless, digital information and
entertainment services to consumers in their cars and trucks.  Percepta,  LLC, a
joint venture with TeleTech  Holdings,  Inc. that provides leading edge customer
relationship management services, was launched in 2000 as well. Ford's ownership
interests in Wingcast and Percepta are 80% and 45%, respectively.

     Finally,  in the  B2B  (Business-to-Business)  arena,  ConsumerConnect  was
instrumental in launching Covisint, LLC -- a business-to-business Internet based
supplier exchange. Covisint will streamline the automotive industry supply chain
by providing  efficiencies to manufacturers  and suppliers in almost every stage
of the order-to-delivery  process.  Covisint was founded by Ford, General Motors
Corporation,  DaimlerChrysler  AG, Renault S.A. and Nissan Motor Co., Ltd.. Each
of  these  founding  automotive  manufacturers  has  an  ownership  interest  in
Covisint,  and Oracle  Corporation  and Commerce  One,  Inc. are the  technology
partners. Ford's ownership interest in Covisint is approximately 31%.

                                       8


Item 1.  Business (Continued)


                            Financial Services Sector


Ford Motor Credit Company
-------------------------

     Ford Credit is an indirect wholly-owned subsidiary of Ford. Ford Credit and
its subsidiaries  provide  wholesale  financing and capital loans to Ford retail
dealerships and associated  non-Ford  dealerships  throughout the world. Most of
these  dealerships  are privately  owned.  Ford Credit also purchases from these
dealerships  retail  installment sale contracts and retail leases.  In addition,
Ford Credit also makes loans to vehicle leasing companies, the majority of which
are  affiliated  with such  dealerships.  Ford Credit  directly  and through its
subsidiaries provides these financing services in North America,  South America,
Europe,  Australia,  and Asia to Ford and non-Ford  dealerships.  A  substantial
majority of all new vehicles  financed by Ford Credit and its  subsidiaries  are
manufactured  by Ford and our  affiliates.  Ford  Credit  also  provides  retail
financing for used vehicles built by Ford and other  manufacturers.  In addition
to vehicle financing, Ford Credit makes loans to affiliates of Ford and finances
certain receivables of Ford and our subsidiaries.

     Outside  the United  States,  FCE Bank plc ("Ford  Credit  Europe") is Ford
Credit's largest operation.  Ford Credit Europe's primary business is to support
the sale of Ford vehicles in Europe through the Ford dealer  network.  A variety
of retail, leasing and wholesale finance plans are provided in most countries in
which it operates.

     Ford Credit also conducts  insurance  operations  through The American Road
Insurance Company and its subsidiaries in the United States and Canada. American
Road's business  primarily  consists of: extended service plan contracts for new
and used  vehicles  manufactured  by  affiliated  and  nonaffiliated  companies,
primarily  originating  from Ford dealers;  physical damage  insurance  covering
vehicles and equipment financed at wholesale by Ford Credit; and the reinsurance
of credit life and credit disability insurance for retail purchasers of vehicles
and equipment.  A majority of the extended service plan contracts and all of the
warranty   contract   business  of  American  Road  is  ceded  to  Gentle  Winds
Reinsurance, Ltd., an off-shore subsidiary of Ford.

     Ford Credit financed the following  percentages of new Ford cars and trucks
sold or leased at retail and sold at wholesale  in the United  States and Europe
during the last three years:


                                                          Years Ended December 31,
                                              ----------------------------------------------------
                                                   2000               1999               1998
                                              ---------------    ---------------    --------------
                                                                                 
     United States
     -------------
     Retail*............................           50.9%              47.2%               42.3%
     Wholesale..........................           83.5               83.5                82.5

     Europe
     ------
     Retail*............................           31.7               32.8                32.5
     Wholesale..........................           95.9               96.4                95.4

     ___________________
     * As a percentage of total sales and leases of Ford vehicles, including
     cash sales.

                                       9


Item 1.  Business (Continued)


     Ford  Credit's  net finance  receivables  and net  investment  in operating
leases were as follows at the dates indicated (in millions):


                                                                                     December 31,
                                                                         -------------------------------------
                                                                              2000                 1999
                                                                         ----------------     ----------------
                                                                                            
         Net finance receivables
              Retail                                                         $80,797              $76,182
              Wholesale                                                       34,122               26,450
              Other                                                            9,130                7,244
                                                                            --------             --------
                  Total finance receivables, net of unearned income          124,049              109,876
              Less:  allowance for credit losses                              (1,311)              (1,122)
                                                                            --------             --------
                  Net finance receivables                                   $122,738             $108,754
                                                                            ========             ========

         Net investment in operating leases
              Vehicles, at cost                                              $48,491              $41,537
              Lease origination costs                                             53                   52
                  Less:  Accumulated depreciation                             (9,753)              (8,397)
                         Allowance for credit losses                            (334)                (354)
                                                                             -------              -------

                      Net investment in operating leases                     $38,457              $32,838
                                                                             =======              =======


     Ford Credit's  total  receivable  balances  related to accounts past due 60
days or more were as follows at the dates indicated (in millions):


                                                                                     December 31,
                                                                         -------------------------------------
                                                                              2000                  1999
                                                                         ---------------        --------------
                                                                                             
         Retail                                                             $1,204                 $  868
         Wholesale                                                             234                    128
         Other                                                                  19                     36
                                                                            ------                 ------
               Total                                                        $1,457                 $1,032
                                                                            ======                 ======



     The following table sets forth information concerning Ford Credit's and its
affiliates'  credit loss experience  with respect to the various  categories and
geographic regions of financing during the years indicated (in millions):



                                                                          Years Ended or at December 31,
                                                                  ------------------------------------------------
                                                                      2000             1999              1998
                                                                  -------------    -------------     -------------
                                                                                               
         Net credit losses/(recoveries)
             Retail*                                                 $1,283           $  995            $1,031
             Wholesale                                                   14                3                 9
             Other                                                        0                2                (1)
                                                                     ------           ------            ------
                Total                                                $1,297           $1,000            $1,039
                                                                     ======           ======            ======

                      United States                                  $1,205           $  884            $  916
                      Europe                                             65               66                57
                      Other international                                27               50                66
                                                                     ------           ------            ------
                            Total                                    $1,297           $1,000            $1,039
                                                                     ======           ======            ======

         Net losses as a percentage of average net receivables**
             Retail                                                    1.14%            0.95%             1.08%
             Total finance receivables                                 0.84             0.74              0.86

         Provision for credit losses                                 $1,671           $1,166            $1,180
         Allowance for credit losses                                  1,645            1,476             1,548
         Allowance for credit losses as a percentage
                      of net receivables**                             1.02%            1.04%             1.19%


*Includes net credit losses on operating leases.
**Includes net investment in operating leases.

                                       10


Item 1.  Business (Continued)


     Shown below is an analysis of Ford  Credit's  allowance  for credit  losses
related to finance  receivables and operating leases for the years indicated (in
millions):


                                                                      2000             1999              1998
                                                                  -------------    -------------     -------------
                                                                                               
         Balance, beginning of year                                  $1,476           $1,548            $1,471
           Additions                                                  1,671            1,166             1,180
           Deductions
              Losses                                                  1,597            1,274             1,243
              Recoveries                                               (300)            (274)             (203)
                                                                     ------           ------            ------
                Net losses                                            1,297            1,000             1,040
         Other changes, principally
           amounts relating to finance
           receivables and operating
           leases sold                                                  205              238                63
                                                                     ------           ------            ------
              Net deductions                                          1,502            1,238             1,103
                                                                     ------           ------            ------
         Balance, end of year                                        $1,645           $1,476            $1,548
                                                                     ======           ======            ======


     Ford Credit relies heavily on its ability to raise  substantial  amounts of
funds. These funds are obtained primarily by the issuance of term debt, the sale
of commercial  paper,  and, in the case of Ford Credit  Europe,  the issuance of
certificates of deposit.  Funds also are provided by retained earnings and sales
of receivables.  The level of funds can be affected by certain transactions with
Ford,  such as capital  contributions,  interest  supplements  and other support
costs  from  Ford  for  vehicles  financed  and  leased  by  Ford  Credit  under
Ford-sponsored  special  financing or leasing  programs, and dividend  payments.
Funds  also can be  affected  by the timing of  payments  for the  financing  of
dealers' wholesale inventories and for income taxes.

     The ability of Ford Credit to obtain funds is affected by its debt ratings,
which are closely  related to the outlook for, and financial  condition of, Ford
and the nature and availability of support facilities. The long-term senior debt
of each of Ford,  Ford Credit and Ford  Credit  Europe is rated "A2" (by Moody's
Investors  Service) and "A" (by Standard & Poor's Ratings Group). The commercial
paper of each of Ford Credit and FCE Bank is rated  "Prime-1"  (by  Moody's),
"A-1" (by S&P), and "F1" (by Fitch, Inc.).

     For a  discussion  of how Ford  Credit  manages  its and its  subsidiaries'
credit risk, lease residual risks,  financial market risks, and liquidity risks,
see Item 7A, "Quantitative and Qualitative Disclosure About Market Risk".

     Under a profit maintenance  agreement with Ford Credit,  Ford has agreed to
make payments to maintain Ford Credit's earnings at certain levels. In addition,
under a support  agreement  with Ford Credit  Europe,  Ford Credit has agreed to
maintain Ford Credit  Europe's net worth above a minimum level. No payments were
required under either of these agreements during the period 1988 through 2000.

                                       11


Item 1.  Business (Continued)


The Hertz Corporation
---------------------

     Hertz and its  affiliates  and  independent  licensees  operate  what Hertz
believes is the largest  car rental  business in the world based upon  revenues.
They also  operate  one of the largest  industrial  and  construction  equipment
rental  businesses  in  North  America  based  upon  revenues.   Hertz  and  its
affiliates, associates and independent licensees, do the following:

     o rent and lease cars and trucks
     o rent industrial and construction equipment
     o sell their used cars and equipment
     o provide third-party claim management services
     o provide telecommunications services

These businesses are operated from approximately 7,000 locations  throughout the
United States and in over 140 foreign countries and jurisdictions.

     Below are some financial highlights for Hertz (in millions):


                                                                                 Years Ended December
                                                                                         31,
                                                                         -------------------------------------
                                                                              2000                 1999
                                                                         ----------------     ----------------
                                                                                             
         Revenue                                                              $5,087               $4,728
         Pre-Tax Income                                                          581                  560
         Net Income                                                              358                  336


     Between  April  1997 and  March  2001,  we owned  approximately  81% of the
economic interest of Hertz, with the remaining 19% interest being represented by
shares of Hertz common stock that were publicly traded. In March 2001, through a
cash tender offer and a merger transaction, we acquired the publicly held shares
and, as a result, Hertz has become an indirect, wholly-owned subsidiary of Ford.

                                       12


Item 1.  Business (Continued)


                             Governmental Standards

     A number of  governmental  standards  and  regulations  relating to safety,
corporate  average fuel economy  ("CAFE"),  emissions  control,  noise  control,
damageability,  and theft  prevention  are  applicable  to new  motor  vehicles,
engines,  and equipment  manufactured for sale in the United States,  Europe and
elsewhere.  In addition,  manufacturing  and assembly  facilities  in the United
States,  Europe and elsewhere are subject to stringent standards  regulating air
emissions,  water  discharges,  and  the  handling  and  disposal  of  hazardous
substances.  Such facilities in the United States and Europe also are subject to
comprehensive national,  regional,  and/or local permit programs with respect to
such matters.

     Mobile Source Emissions Control - U.S. Requirements.  The Federal Clean Air
Act imposes stringent limits on the amount of regulated pollutants that lawfully
may be emitted by new motor vehicles and engines produced for sale in the United
States.  Currently,  most light duty  vehicles  sold in the United  States  must
comply  with these  standards  for 10 years or 100,000  miles,  whichever  first
occurs.   The  U.S.   Environmental   Protection  Agency  ("EPA")  recently  has
promulgated  post-2004  model year  standards  that are more  stringent than the
default  standards  contained in the Clean Air Act. These new  regulations  will
require most light duty trucks to meet the same emissions standards as passenger
cars by the 2007 model year.  The stringency of the new standards may impact our
ability to produce and offer a broad range of products with the  characteristics
and functionality  that customers  demand.  The new standards also are likely to
limit severely the use of diesel technology,  which could negatively impact fuel
economy performance.  The EPA has also promulgated  post-2004 emission standards
for  "heavy-duty"  trucks  (8,500-14,000  lbs.  gross  vehicle  weight).   These
standards are likely to pose technical challenges and may affect the competitive
position of full-line vehicle manufacturers such as Ford.

     Pursuant to the Clean Air Act,  California  has  received a waiver from the
EPA to establish its own unique emissions  control  standards.  New vehicles and
engines sold in  California  must be certified by the  California  Air Resources
Board ("CARB").  CARB's emissions  requirements  (the "California  program") for
model  years 1994  through  2003  require  manufacturers  to meet a  non-methane
organic gases fleet average  requirement  that is  significantly  more stringent
than that prescribed by the Clean Air Act for the corresponding periods of time.
In late 1998, CARB adopted stringent new vehicle  emissions  standards that must
be phased in beginning in the 2004 model year.  These new  standards  treat most
light duty trucks the same as passenger  cars and require both types of vehicles
to meet new stringent emissions requirements. It is also expected that these new
standards will essentially  eliminate the use of diesel  technology.  CARB's new
standards present a difficult engineering and technological  challenge,  and may
impact our  ability  to produce  and offer a broad  range of  products  with the
characteristics and functionality that customers demand.

     Since  1990,  the  California   program  has  included   requirements   for
manufacturers to produce and deliver for sale "zero-emission vehicles" ("the ZEV
mandate").  The ZEV mandate  initially  required that a specified  percentage of
each manufacturer's vehicles produced for sale in California, beginning at 2% in
1998 and increasing to 10% in 2003,  must be  zero-emission  vehicles  ("ZEVs"),
which produce no emissions of regulated pollutants. In 1996, CARB eliminated the
ZEV mandate for the  1998-2002  model  years,  but retained the 10% mandate in a
modified form beginning with the 2003 model year. Around the same time,  vehicle
manufacturers  voluntarily  entered  into  agreements  with CARB to conduct  ZEV
demonstration programs.

     In January 2001, CARB voted to approve a series of complex modifications to
the ZEV mandate. These modifications require large-volume  manufacturers such as
Ford to produce "partial zero-emission vehicles" ("PZEVs") and/or ZEVs beginning
in  the  2003  model  year.   PZEVs  are  vehicles   certified  to  California's
"super-ultra-low  emission  vehicle"  ("SULEV")  tailpipe  standards,  with zero
evaporative emissions. Using a series of phase-in tables and credit adjustments,
the  number  of  ZEVs  required   under  the  modified   mandate  will  increase
substantially between 2003 and 2018.

     The Clean Air Act permits  other states that do not meet  national  ambient
air quality standards to adopt  California's motor vehicle emission standards no
later than two years before the affected  model year.  New York,  Massachusetts,
Vermont,  and Maine adopted the  California  standards  effective  with the

                                       13


Item 1.  Business (Continued)


2001 model year or before.  New York,  Massachusetts,  and  Vermont  have either
previously  adopted,  or indicated an intention  to adopt,  the  California  ZEV
mandate;  however,  at this  writing it is not clear  whether  these states will
adopt the ZEV  regulations  as modified by California in 2001.  Maryland and New
Jersey have laws  requiring  the  adoption of  California  standards  if certain
triggers are met. There are problems with transferring  California  standards to
northeast  states,  including  the  following:  1) the driving  range of ZEVs is
greatly diminished in cold weather, thereby limiting their market appeal; and 2)
the northeast states have refused to adopt the California  reformulated gasoline
regulations,  which may impair  the  ability of  vehicles  to meet  California's
in-use standards.

     Battery electric  vehicles are the only  zero-emission  vehicles  currently
feasible for mass production.  Despite intensive  research  activities,  battery
technology  has not made the  major  strides  that were  projected  when the ZEV
mandate  was  originally  enacted  in  1990.  Battery-electric  vehicles  remain
considerably  more  costly  than  gasoline-powered  vehicles,  and  they  have a
relatively  short  driving  range before they must be  recharged.  These factors
limit the consumer appeal of battery-powered vehicles. Ford plans to comply with
the early years of the modified ZEV mandate  through sales of its Th!nk brand of
electric  vehicles,  along with one or more PZEV  models.  In the  longer  term,
however,  it is doubtful  whether the market will  support the number of battery
electric  vehicles called for by the modified ZEV mandate.  Fuel cell technology
may in the future enable production of ZEVs with widespread consumer appeal, but
commercially  feasible fuel cell technology appears to be a decade or more away.
Compliance with the ZEV mandate may eventually require costly actions that would
have a  substantial  adverse  effect on Ford's  sales  volume and  profits.  For
example,  we could be  required  to curtail  the sale of  non-electric  vehicles
and/or offer to sell electric vehicles well below cost. Other states may seek to
adopt the ZEV  mandate  pursuant  to Section  177 of the Clean air Act,  thereby
increasing the costs to Ford.

     Under the  Clean Air Act,  the EPA and CARB can  require  manufacturers  to
recall and repair  non-conforming  vehicles.  The EPA,  through  its  testing of
production vehicles, also can halt the shipment of non-conforming vehicles. Ford
may be required to recall, or may voluntarily recall, vehicles for such purposes
in the future. The costs of related repairs or inspections  associated with such
recalls can be substantial.

     European  Requirements.   European  Union  ("EU")  directives  and  related
legislation limit the amount of regulated  pollutants that may be emitted by new
motor  vehicles  and  engines  sold in the EU.  In 1998,  the EU  adopted  a new
directive on emissions  from passenger cars and light  commercial  trucks.  More
stringent emissions standards apply to new car certifications  beginning January
1, 2000 and to new car  registrations  beginning  January  1, 2001  ("Stage  III
Standards"). A second level of even more stringent emission standards will apply
to new car certifications beginning January 1, 2005 and to new car registrations
beginning  January  1,  2006  ("Stage  IV  Standards").   The  comparable  light
commercial  truck Stage III  Standards  and Stage IV  Standards  would come into
effect  one year  later  than the  passenger  car  requirements.  The  directive
includes  a  framework  that  permits  EU  member  states  to  introduce  fiscal
incentives  to  promote  early  compliance  with  the  Stage  III and  Stage  IV
Standards. The directive also introduces on-board diagnostic requirements,  more
stringent evaporative emission  requirements,  and in-service compliance testing
and recall provisions for emissions-related defects that occur in the first five
years or 80,000  kilometers of vehicle life  (extended to 100,000  kilometers in
2005).  The  Stage IV  Standards  for  diesel  engines  are not yet  technically
feasible  and may impact  our  ability  to  produce  and offer a broad  range of
products with the  characteristics  and  functionality  that  customers  want. A
related EU directive  was adopted at the same time which  establishes  standards
for cleaner fuels  beginning in 2000 and even cleaner  fuels in 2005.  The EU is
setting up a program to assess the need for further changes to vehicle  emission
and fuel standards after 2005.

     Certain  European  countries are  conducting  in-use  emissions  testing to
ascertain  compliance of motor  vehicles with  applicable  emissions  standards.
These  actions  could lead to recalls of  vehicles;  the future costs of related
inspection or repairs could be substantial.

     Motor Vehicle Safety - The National Traffic and Motor Vehicle Safety Act of
1966 (the "Safety Act") regulates motor vehicles and motor vehicle  equipment in
two primary ways.  First, the Safety Act prohibits the sale in the United States
of any new  vehicle  or  equipment  that does not  conform to  applicable  motor
vehicle  safety  standards  established by the National  Highway  Traffic Safety
Administration (the "Safety

                                       14


Item 1.  Business (Continued)


Administration").  Meeting or exceeding many safety  standards is costly because
the standards  tend to conflict with the need to reduce  vehicle weight in order
to meet emissions and fuel economy  standards.  Second,  the Safety Act requires
that defects  related to motor vehicle safety be remedied  through safety recall
campaigns. There were pending before the Safety Administration  approximately 30
investigations  relating  to  alleged  safety  defects  in Ford  vehicles  as of
February 7, 2001. A  manufacturer  also is  obligated  to recall  vehicles if it
determines  that they do not comply with a safety  standard.  Should Ford or the
Safety  Administration  determine that either a safety defect or a noncompliance
exists  with  respect to certain of Ford's  vehicles,  the costs of such  recall
campaigns could be substantial.

     The Transportation  Recall Enhancement,  Accountability,  and Documentation
Act (the  "TREAD  Act") was  signed  into law in  November  2000.  The TREAD Act
establishes  new  reporting  requirements  for  motor  vehicles,  motor  vehicle
equipment,   and  tires,   including  reporting  to  the  Safety  Administration
information on foreign recalls and information received by the manufacturer that
may assist the agency in the identification of safety defects. The obligation of
vehicle  manufacturers  to provide,  on a cost-free basis, a remedy for vehicles
with an identified safety defect or non-compliance  issue is extended from eight
years to ten years by the new  legislation.  The Safety  Administration  is also
required  to develop a new dynamic  test on  rollovers  to be used for  consumer
information.  Potential  civil penalties are increased from $1,000 to $5,000 per
day for certain statutory violations,  with a maximum penalty of $15,000,000 for
a related series of violations.  Similar penalties are included for violation of
the reporting  requirements.  Criminal  penalties are introduced for persons who
make false statements to the government or withhold  information with the intent
to mislead the government about safety defects that have caused death or serious
bodily injury.

     Canada,  the EU,  individual  member  countries  within  the EU,  and other
countries in Europe, South America and the Asia Pacific markets also have safety
standards  applicable  to motor  vehicles and are likely to adopt  additional or
more stringent standards in the future.

     Motor  Vehicle Fuel Economy - U.S.  Requirements.  Under 49 U.S.C.  Chapter
329,  vehicles  must  meet  minimum  Corporate  Average  Fuel  Economy  ("CAFE")
standards  set by the  Safety  Administration.  A  manufacturer  is  subject  to
potentially substantial civil penalties if it fails to meet the CAFE standard in
any model  year,  after  taking  into  account  all  available  credits  for the
preceding three model years and expected  credits for the three succeeding model
years.

     The law  established a passenger car CAFE standard of 27.5 mpg for 1985 and
later model years, which the Safety Administration believes it has the authority
to amend to a level it determines to be the maximum  feasible level.  The Safety
Administration  has  established  a 20.7 mpg CAFE  standard  applicable to light
trucks.

     Ford expects to be able to comply with the  foregoing  CAFE  standards,  in
some cases using credits from prior or  succeeding  model years.  In general,  a
continued  increase  in demand for larger  vehicles,  coupled  with a decline in
demand for small and middle-size vehicles could jeopardize our long-term ability
to maintain compliance with CAFE standards.

     At the request of Congress,  the National Academy of Sciences  ("NAS"),  in
conjunction with the Department of Transportation  ("DOT"), is studying possible
changes to the CAFE standards and/or regulations.  The NAS study is scheduled to
be completed  by the third  quarter of 2001.  To the extent that NAS  recommends
changes, they will not take effect automatically. Modifications would need to be
implemented either through DOT rulemaking or through amendments to the CAFE law.

     It is  anticipated  that  efforts  may be made to raise  the CAFE  standard
because of concerns for carbon dioxide  ("CO2")  emissions,  energy  security or
other reasons.  Former President  Clinton's  Climate Change Action Plan ("CCAP")
sets a goal to improve new vehicle fuel efficiency in an amount equivalent to at
least  2% per  year  over a 10 to 15 year  period.  In  addition,  international
concerns  over global  warming due to the emission of  "greenhouse  gasses" have
given rise to strong pressures to improve fuel economy  performance.  During the
December  1997  meeting  of the  parties to the United  Nations  Climate  Change
Convention in Kyoto,  Japan,  the United States agreed to reduce  greenhouse gas
emissions by 7% below

                                       15


Item 1.  Business (Continued)


their 1990 levels during the 2008-2012 period (the "Kyoto Protocol").  The Kyoto
Protocol is not yet binding in the United States,  pending  ratification  by the
Senate. In addition,  a petition has been filed with the EPA requesting that the
Agency  regulate CO2 emissions  from motor vehicles under the Clean Air Act. The
EPA has requested public comment on this petition.

     If the CCAP or Kyoto  Protocol  goals are  partially  or fully  implemented
through increases in the CAFE standard, if significant increases in car or light
truck CAFE standards for subsequent model years otherwise are imposed, or if EPA
attempts to regulate  CO2 from motor  vehicles,  Ford might find it necessary to
take various costly actions that could have  substantial  adverse effects on its
sales volume and profits. For example,  Ford might have to curtail production of
larger  family-size  and  luxury  cars  and  full-size  light  trucks,  restrict
offerings of engines and popular  options,  and increase market support programs
for its most fuel-efficient cars and light trucks.

     Foreign Requirements.  The EU is also a party to the Kyoto Protocol and has
agreed to reduce  greenhouse  gas emissions by 8% below their 1990 levels during
the 2008-2012  period.  In December  1997,  the European  Council of Environment
Ministers (the "Environment  Council") reaffirmed its goal to reduce average CO2
emissions  from new cars to 120 grams per  kilometer by 2010 (at the latest) and
invited  European  motor  vehicle  manufacturers  to negotiate  further with the
European Commission on a satisfactory voluntary  environmental agreement to help
achieve this goal.  In October 1998,  the EU agreed to support an  environmental
agreement with the European Automotive Manufacturers  Association (of which Ford
is  a  member)  on  CO2  emission   reductions  from  new  passenger  cars  (the
"Agreement").  The Agreement  establishes an emission target of 140 grams of CO2
per  kilometer  for the average of new cars sold in the EU by the  Association's
members in 2008. In addition,  the Agreement  provides that certain  Association
members  (including  Ford) will introduce models emitting no more than 120 grams
of CO2 per  kilometer in 2000,  and  establishes  an  estimated  target range of
165-170  grams of CO2 per  kilometer  for the  average of new cars sold in 2003.
Also in 2003,  the  Association  will review the  potential for  additional  CO2
reductions, with a view to moving further toward the EU's objective of 120 grams
of CO2 per kilometer by 2012. The Agreement assumes (among other things) that no
negative measures will be implemented  against  diesel-fueled  cars and the full
availability  of  improved  fuels with low sulfur  content in 2005.  Average CO2
emissions of 140 grams per kilometer for new passenger cars corresponds to a 25%
reduction in average CO2 emissions compared to 1995.

     The Environment Council requested the European Commission to review in 2003
the EU's progress  toward reaching the 120 gram target by 2010, and to implement
annual  monitoring  of the average CO2  emissions  from new  passenger  cars and
progress toward achievement of the objectives for 2000 and 2003.

     In  1995,  members  of  the  German  Automobile  Manufacturers  Association
(including  Ford  Werke  AG) made a  voluntary  pledge to  increase  by 2005 the
average  fuel  economy of new cars sold in Germany by 25% from 1990  levels,  to
make regular reports on fuel consumption,  and to increase industry research and
development  efforts  toward  this  end.  The  German  Automobile  Manufacturers
Association has reported that the industry is on track to meet the pledge.

     Other European countries are considering other initiatives for reducing CO2
emissions  from  motor  vehicles.  Taken  together,  such  proposals  could have
substantial adverse effects on our sales volumes and profits in Europe.

     Japan has adopted automobile fuel consumption goals that manufacturers must
attempt to achieve by the 2000 model year. The consumption  levels apply only to
gasoline-powered  vehicles,  vary by vehicle weight,  and range from 5.8 km/l to
19.2 km/l.

     End-of-Life  Vehicle  Proposal - The European  Parliament  has  published a
Directive  imposing an obligation on motor  vehicle  manufacturers  to take back
end-of-life  vehicles  registered  after  July 1,  2002 with no cost to the last
owner and to take back all other  vehicles as of January 1, 2007.  The Directive
also imposes  requirements on the proportion of the vehicle that may be disposed
of in landfills and the proportion that must be reused or recycled  beginning in
2006, and bans the use of certain substances in vehicles

                                       16


Item 1.  Business (Continued)


beginning  with  vehicles  registered  after July 2003.  Member states may apply
these provisions prior to the dates mentioned  above.  This Directive  imposes a
substantial cost on manufacturers.

     The German Automobile  Association (including Ford Werke AG) and the German
Automobile  Importers  Association  made  a  voluntary  pledge  to  establish  a
nationwide  infrastructure network to take back passenger cars that are at least
12 years old (and meet certain other requirements) on a cost-free basis to their
owners.

     Pollution Control Costs - During the period 2001 through 2005, we expect to
spend  approximately $334 million on our North American and European  facilities
to comply with air and water  pollution and hazardous  waste control  standards,
which now are in effect or are scheduled to come into effect.  Of this total, we
estimate spending approximately $60 million in 2001 and $94 million in 2002.

                                       17


Item 1.  Business (Continued)


                                 Employment Data

     The average number of people we employed by geographic  area was as follows
for the years indicated:


                                                                          2000                 1999
                                                                     ----------------     ----------------
                                                                                        
      United States                                                       163,236              173,045
      Europe                                                              132,473              135,244
      Other                                                                50,282               65,804
                                                                          -------              -------

          Total                                                           345,991              374,093
                                                                          =======              =======


     In 2000,  the average  number of people we employed  decreased 7.5 percent.
The  decrease  was due to our  spin-off  of Visteon  Corporation  and its 17,400
salaried employees and 34,800 non-U.S.  hourly employees,  offset partially by a
number  of  acquisitions  during  2000,  notably  Land  Rover,  which  increased
employment  levels by  approximately  6,300  people.  The numbers  above include
approximately  23,000  hourly  employees  of Ford who are  assigned  to  Visteon
Corporation.  These employees worked at Visteon  facilities in the U.S. prior to
the spin-off and, pursuant to our collective  bargaining agreement with the UAW,
remain Ford employees.  Visteon reimburses Ford for all costs to Ford associated
with these employees. Most of our employees work in our Automotive operations.

     For further information  regarding employment  statistics of Ford, see Item
6. "Selected  Financial Data" later in this Report.  For information  concerning
employee retirement benefits, see Note 12 of our Notes to Consolidated Financial
Statements at the end of this Report.

     Substantially  all of the hourly employees in our Automotive  operations in
the United States are represented by unions and covered by collective bargaining
agreements.  Approximately  99%  of  these  unionized  hourly  employees  in our
Automotive segment are represented by the United Automobile Workers (the "UAW").
Approximately  3% of our salaried  employees  are  represented  by unions.  Most
hourly employees and many non-management  salaried employees of our subsidiaries
outside the United States also are represented by unions.

     We have entered into a collective  bargaining  agreement  with the UAW that
will expire on  September  14,  2003.  We also have  entered  into a  collective
bargaining  agreement  with the Canadian  Automobile  Workers  ("CAW") that will
expire on September 21, 2002.  Among other things,  our agreements  with the UAW
and CAW provide for guaranteed  wage and benefit levels  throughout  their terms
and provide for significant employment security.

     We are or will be negotiating  new collective  bargaining  agreements  with
labor unions in Europe, Mexico and South America,  where current agreements will
expire in 2001. A work stoppage  could occur as a result of these  negotiations,
which, if protracted, could substantially adversely affect Ford's profits.

     In  recent  years  we  have  not  had  significant  work  stoppages  at our
facilities,  but they have occurred in some of our  suppliers'  facilities.  Any
protracted  work stoppages in the future,  whether in our facilities or those of
certain  suppliers,   could  substantially   adversely  affect  our  results  of
operations.

                                       18


Item 1.  Business (Continued)


                      Engineering, Research and Development


     We conduct engineering,  research and development  primarily to improve the
performance (including fuel efficiency), safety and customer satisfaction of our
products,  and to develop new products.  We also have staffs of  scientists  who
engage in basic research. We maintain extensive engineering, research and design
facilities for these purposes,  including  large centers in Dearborn,  Michigan;
Dunton,  England; and Merkenich,  Germany.  Most of our engineering research and
development relates to our Automotive operating segment.

     During the last three years, we took charges to our consolidated income for
engineering,  research and  development  we sponsored in the  following  amounts
(restated for prior years to exclude Visteon): $6.8 billion (2000), $6.0 billion
(1999) and $5.3 billion (1998). Any customer-sponsored  research and development
activities that we conduct are not material.


Item 2.  Properties
-------------------

     We own substantially all of our U.S. manufacturing and assembly facilities.
These  facilities  are  situated in various  sections of the country and include
assembly  plants,  engine plants,  casting plants,  metal stamping  plants,  and
transmission  plants.  We  also  own a  majority  of our  distribution  centers,
warehouses, and sales offices, with the remainder being leased.

     In  addition,  we  maintain  and  operate  manufacturing  plants,  assembly
facilities,  parts  distribution  centers,  and engineering  centers outside the
United States. We own substantially all of these facilities.

     Our Automotive segment operates approximately 135 plants; 538 distribution,
engineering and research and development centers, and warehouses;  and 311 owned
dealerships.

     The furniture, equipment and other physical property owned by our Financial
Services operations are not material in relation to their total assets.

                                       19



Item 3.  Legal Proceedings
--------------------------

     Various legal actions,  governmental  investigations  and  proceedings  and
claims are pending or may be instituted or asserted in the future against us and
our subsidiaries,  including those arising out of the following: alleged defects
in our products;  governmental regulations covering safety,  emissions, and fuel
economy; financial services;  employment-related  matters; dealer, supplier, and
other  contractual   relationships;   intellectual   property  rights;   product
warranties; and environmental matters. Some of the pending legal actions are, or
purport to be,  class  actions.  Some of the  foregoing  matters  involve or may
involve compensatory, punitive or antitrust or other multiplied damage claims in
very large amounts, or demands for recall campaigns,  environmental  remediation
programs,  sanctions or other relief which, if granted, would require very large
expenditures. See Item 1,"Business - Governmental Standards". Included among the
foregoing matters are the following:


Firestone Matters
-----------------

     On August 9, 2000,  Bridgestone/Firestone,  Inc. ("Firestone")  announced a
recall of all  Firestone  ATX and ATX II tires  (P235/75R15)  produced  in North
America  since 1991 and  Wilderness AT tires of that same size  manufactured  at
Firestone's Decatur,  Illinois plant. Firestone estimated that about 6.5 million
of the  affected  tires  were  still  in  service  on the date  the  recall  was
announced.  The recall was announced following an analysis by Ford and Firestone
that  identified  a  statistically  significant  incidence  of tread  separation
occurring in the affected  tires.  Most of the affected  tires were installed as
original  equipment on Ford  Explorer  sport utility  vehicles.  We believe that
sufficient  tires to provide for the  completion of the recall were available by
the end of November 2000.

     The Safety  Administration is investigating this matter both to make a root
cause assessment and to determine whether  Firestone's recall should be expanded
to include other Firestone  tires. We are actively  cooperating  with the Safety
Administration  in their  investigation  by providing  technical  assistance and
sharing engineering analysis and root cause analysis.

     In the United States,  the recall of certain Firestone tires, most of which
were installed as original equipment on Ford Explorers, has led to a significant
number of personal injury and class action lawsuits  against Ford and Firestone.
Plaintiffs in the personal  injury cases  typically  allege that their  injuries
were  caused by defects in the tire that  caused it to lose its tread  and/or by
defects in the  Explorer  that caused the vehicle to roll over.  For those cases
involving Explorer  rollovers in which damages have been specified,  the damages
specified  by the  plaintiffs,  including  both  actual  and  punitive  damages,
aggregated approximately $590 million. However, in most of the actions described
above,  no dollar amount of damages is specified or the specific amount referred
to is only the jurisdictional  minimum. It has been our experience that in cases
that  allege a  specific  amount of  damages  in  excess  of the  jurisdictional
minimum, such amounts, on average, bear little relation to the actual amounts of
damages, if any, paid by Ford in resolving such cases.

     In contrast to the cases described in the preceding paragraph,  most of the
Firestone  related  class  actions have been filed on behalf of persons who have
never been in an  accident.  The class  actions  seek to expand the scope of the
recall to include  other tires and to award to  consumers  the cost of replacing
those tires or the alleged  diminution in the value of the vehicle caused by the
allegedly defective tires or by alleged defects in the Explorer.  Typically, the
plaintiffs  in both the  personal  injury  lawsuits  and the class  actions seek
punitive damages.

     The Company also has been served with shareholder derivative and securities
fraud lawsuits.  The shareholder  derivative  actions filed against the Board of
Directors and the Company allege that the Company's board members breached their
fiduciary duties to the Company and shareholders by failing to inform themselves
adequately  regarding Firestone tires, failing to take certain actions regarding
the design of the Explorer,  failing to report problems with Firestone tires and
to stop using Firestone tires as

                                       20



Item 3.  Legal Proceedings (Continued)

original equipment, failing to recall all affected tires in a timely manner, and
mismanaging  the recall once it was announced.  The plaintiffs  seek  injunctive
relief and damages, a return of all director  compensation  during the period of
the alleged breaches, and attorneys' fees.

     The securities  fraud class actions allege that from early 1999 through the
announcement of the Firestone tire recall,  Ford made  misrepresentations  about
the safety of Ford products and the Explorer in particular, and allegedly failed
to disclose material facts about problems with Firestone tires and the safety of
Explorers  equipped with Firestone tires. The plaintiffs claim that, as a result
of these misrepresentations or omissions,  they purchased Ford stock at inflated
prices and were  damaged when the price of the stock fell upon  announcement  of
the recall and subsequent revelations.

     Several governmental authorities in Venezuela are conducting investigations
of accidents in Venezuela involving Explorers equipped with Firestone tires most
of  which  were  locally  made.   Ford  of  Venezuela   implemented  a  customer
satisfaction  program in May 2000 to replace all Firestone  Wilderness  tires on
Explorers and light trucks in Venezuela, Columbia and Ecuador. Ford of Venezuela
essentially  completed the tire  replacement  customer  satisfaction  program in
Venezuela in December 2000 and in Colombia and Ecuador in March 2001.

     An investigation  is being conducted by the prosecutor's  office in Caracas
to determine  whether  criminal  charges should be brought against any Firestone
and Ford of  Venezuela  directors,  officers,  and  managers  following a report
submitted  by the  consumer  protection  agency  of the  Venezuelan  government,
INDECU,  to the  Venezuelan  Attorney  General.  The report alleged that several
unsubstantiated  defects  in  the  Explorer  had  contributed  to  the  rollover
accidents  as well as  recommending  an  additional  investigation  because  the
parties had not taken action  sooner.  INDECU also has  indicated it may open an
administrative  proceeding  to determine if fines up to $11,000 per complaint it
has received from consumers  should be levied against  Firestone  and/or Ford of
Venezuela.

     A  committee   of  the   Venezuelan   National   Assembly  or  congress  is
investigating  the  cause  and  handling  of the  Explorer  accidents  caused by
Firestone  tire tread  separation  and has  designated  a  technical  commission
composed primarily of Venezuelan  university  professors to study the causes and
provide a report on their findings.  This  investigation is continuing with full
Ford cooperation.


Other Product Liability Matters
-------------------------------

     Occupant  Restraint  Systems.  Ford is a defendant  in various  actions for
damages  arising out of automobile  accidents  where the  plaintiffs  claim that
their  injuries  resulted from (or were  aggravated  by) alleged  defects in the
occupant  restraint  systems in vehicle lines of various model years.  For those
cases in which  damages  have  been  specified,  the  damages  specified  by the
plaintiffs, including both actual and punitive damages, aggregated approximately
$603 million at December 31, 2000.

     Bronco  II.  Ford  is a  defendant  in  various  personal  injury  lawsuits
involving the alleged propensity of Bronco II utility vehicles to roll over. For
those cases in which damages have been specified,  the damages  specified by the
plaintiffs, including both actual and punitive damages, aggregated approximately
$2.4 billion at December 31, 2000.

     In most of the actions  described in the two  paragraphs  above,  no dollar
amount of damages is specified  or the  specific  amount we refer to is only the
jurisdictional  minimum.  It has been our experience that in cases that allege a
specific  amount  of  damages  in  excess of the  jurisdictional  minimum,  such
amounts,  on average,  bear little relation to the actual amounts of damages, if
any, paid by Ford in resolving such cases.  Any damages we pay generally are, on
average,  substantially less than the amounts originally claimed. In addition to
the pending  actions,  accidents have occurred and claims have arisen which also
may result in lawsuits in which the plaintiffs may allege similar defects.

     Asbestos.  We are a defendant in various  actions for  injuries  claimed to
have  resulted from alleged  contact with certain Ford parts and other  products
containing asbestos. The plaintiffs in these actions seek

                                       21


Item 3.  Legal Proceedings (Continued)

damages,  including  both actual and punitive  damages,  of  approximately  $1.7
billion at December 31, 2000. (In some of these actions, the plaintiffs have not
specified a dollar amount of damages or the specific  amount referred to is only
the jurisdictional  minimum.) As distinguished from most lawsuits against us, in
most of these asbestos-related cases, we are but one of many defendants.


Environmental Matters
---------------------

     General.   We  have  received  notices  under  various  federal  and  state
environmental laws that we (along with others) may be a potentially  responsible
party for the costs associated with  remediating  numerous  hazardous  substance
storage,  recycling or disposal sites in many states and, in some instances, for
natural  resource  damages.  We also  may have  been a  generator  of  hazardous
substances  at a number of other sites.  The amount of any such costs or damages
for which we may be held responsible could be substantial. The contingent losses
that we expect to incur in connection with many of these sites have been accrued
and those losses are  reflected in our financial  statements in accordance  with
generally  accepted  accounting   principles.   However,  for  many  sites,  the
remediation  costs and other damages for which we ultimately  may be responsible
are not reasonably  estimable  because of uncertainties  with respect to factors
such as our  connection to the site or to materials  there,  the  involvement of
other  potentially  responsible  parties,  the  application  of laws  and  other
standards  or  regulations,  site  conditions,  and  the  nature  and  scope  of
investigations,  studies,  and  remediation  to  be  undertaken  (including  the
technologies  to  be  required  and  the  extent,   duration,   and  success  of
remediation). As a result, we are unable to determine or reasonably estimate the
amount of costs or other  damages for which we are  potentially  responsible  in
connection with these sites, although that total could be substantial.

     MFA Grand Jury Matter. The U.S. Department of Justice ("DOJ"),  the EPA and
the  Federal  Bureau  of  Investigation   are  investigating  the  circumstances
surrounding  Ford's past use of an engine  control  strategy  that improved fuel
economy,  but had the side effect of increasing  nitrogen oxide  emissions.  The
engine control strategy (Managed Fuel Air, or "MFA") was used on 1997 model year
Econoline vans (about 60,000 vehicles). In an earlier civil investigation,  Ford
entered  into a  consent  decree  with the DOJ and the EPA and  agreed to pay $8
million in fines and special  projects,  in addition to recalling  the Econoline
vans. Ford also settled similar issues with CARB. We have met with attorneys and
investigators from the government and are cooperating in the investigation.

     Waste Disposal.  The EPA has initiated a civil  enforcement  action against
Ford as a result of Ford  Venezuela's  shipment  of  industrial  wastes from its
Valencia  Assembly  Plant in  Venezuela  for  disposal  in Texas.  Ford also has
received a subpoena  and been  notified  that it is the  subject of a grand jury
investigation  based on the same facts.  Ford  Venezuela  shipped the industrial
waste  to  the  U.S.  for  disposal  under  the  more  stringent  U.S.  disposal
requirements  because of the  unavailability of adequate disposal  facilities in
Venezuela  and to ensure  proper  disposal of the waste.  Although Ford believes
that the  subject  waste is  properly  classified  as  non-hazardous  under U.S.
environmental  laws, the EPA contends that even if the wastes do not exhibit any
hazardous  characteristics,  they  nevertheless  may be the product of a process
that is automatically deemed hazardous under applicable regulations.  If Ford is
determined to have violated EPA regulations  regarding the disposal of hazardous
wastes,  Ford could be required  to pay  substantial  fines  which could  exceed
$100,000.  It is impossible at this point in the  proceedings  to determine what
amount, if any, Ford may be required to pay.

     On-Board  Diagnostics  Investigation.  The EPA has  notified  Ford that the
system for  monitoring  fuel vapor leaks on about 6 million  1997-98  model year
vehicles  is  inadequate  and was not  described  fully in Ford's  certification
application.  The EPA may request that Ford  implement a recall to reprogram the
monitor.

     Ohio Assembly  Plant.  In September  1999, the EPA filed an  administrative
complaint  against Ford  alleging  violations of the Resource  Conservation  and
Recovery Act ("RCRA") at Ford's Ohio Assembly Plant. The alleged  violations are
related  to  Ford's  storage  of  hazardous  waste  and  the  absence  of a leak
monitoring program for paint equipment.  The EPA has proposed a civil penalty of
$303,745.  The  one  remaining  count  alleging  failure  to  implement  a  leak
monitoring program for paint equipment remains

                                       22


Item 3.  Legal Proceedings (Continued)


subject to discussion between Ford and the EPA.  Subsequent to the Ohio Assembly
enforcement  action,  Ford has received  notices of violation  alleging the same
noncompliance  at  other  facilities.   Ford  could  be  required  to  implement
monitoring  programs  at all U.S.  plants at an  initial  cost of  approximately
$110,000 and approximately $18,000 each year thereafter.


Class Actions
-------------

     Paint Class Actions.  There are two purported class actions pending against
Ford in Texas and Illinois  alleging claims for fraud,  breach of warranty,  and
violations of consumer  protection  statutes.  The Texas case purports to assert
claims  on behalf of Texas  residents  who have  experienced  paint  peeling  in
certain 1984 through 1992 model year Ford  vehicles.  The Illinois case purports
to assert claims on behalf of residents of all states except Louisiana and Texas
who have  experienced  paint  peeling on most 1988  through 1997 model year Ford
vehicles.  Plaintiffs  in both cases  contend that their paint is defective  and
susceptible  to  peeling  because  Ford did not use  spray  primer  between  the
high-build  electrocoat  ("HBEC")  and the color coat.  The lack of spray primer
allegedly causes the adhesion of the color coat to the HBEC to deteriorate after
extended  exposure to ultraviolet  radiation  from sunlight.  Plaintiffs in both
cases seek unspecified  compensatory  damages (in an amount to cover the cost of
repainting  their vehicles and to compensate  for alleged  diminution in value),
punitive damages, attorneys' fees, and interest.

     In the Texas  case,  Sheldon,  the trial  court  certified a class of Texas
owners who experienced  paint peeling because of the alleged defect.  On May 11,
2000,  the Texas Supreme Court reversed the trial court,  decertified  the class
and remanded the case for further  proceedings.  Plaintiffs have filed a renewed
motion  for  class  certification  with the  trial  court.  The  Illinois  case,
Phillips,  is still in the early  stages of  litigation  and there  have been no
significant  developments in that case. We intend to pursue aggressively summary
dismissal and oppose class certification.

     TFI Module Class  Actions.  There are eight class actions  pending in state
courts in Alabama, California, Illinois (2 cases), Maryland, Missouri, Tennessee
and Washington,  alleging defects in thick film ignition modules in more than 22
million  vehicles  manufactured  by Ford  between  1983  and  1995.  With  minor
variations  based upon  state law and  differences  in the scope of the  classes
alleged, all of the cases involve the same legal claims and theories. The Howard
case in California is the lead case.

     The Howard  plaintiffs  assert two claims  for  relief:  violations  of the
California  Consumer  Legal  Remedies  Act  ("CLRA"),   and  violations  of  the
California  Unfair  Competition  Law  ("UCL").  Both  claims  are based upon the
allegation  that Ford  intentionally  concealed  a safety  defect in the subject
vehicles.  The  alleged  defect is that  distributor  mounted  TFI  modules  are
inordinately  prone to  failure  because  they are  exposed to  excessive  heat.
Plaintiffs  contend that TFI failure causes  stalling at highway speeds and that
stalling at highway speeds poses an  unreasonable  risk to motor vehicle safety.
They further contend that Ford knew about the alleged defect and concealed it by
withholding  documents from the Safety Administration during investigations into
stalling, secretly settling personal injury lawsuits in which TFI failure was at
issue,   falsely   advertising  its  vehicles  as  safe,   conducting  an  owner
notification  campaign  on certain  vehicles  rather than a safety  recall,  and
failing to report TFI warranty  claims and failures to the EPA.  Under the CLRA,
plaintiffs  seek a $1,000  statutory  penalty  per class  member  plus  punitive
damages. Under the UCL, plaintiffs seek a recall or "disgorgement" of the amount
Ford saved by not  conducting a recall.  If plaintiffs  are successful on all of
their claims, an adverse judgment in California could be as high as $4 billion.

     A jury  trial on the CLRA  claims in Howard  began in May 1999 and ended in
November  1999 with a  deadlocked  jury and a  mistrial.  If the CLRA claims are
retried,  the retrial  will  probably  occur in the second  quarter of 2001.  On
October  11,  the  court,  sitting  without a jury,  found  that  Ford  violated
California  law by concealing a safety defect.  The court ruled that  California
consumers who paid to replace  distributor-mounted  TFI modules were entitled to
restitution,  that Ford would be required  to recall

                                       23


Item 3.  Legal Proceedings (Continued)


the vehicles in the class,  and that plaintiffs were entitled to attorneys' fees
and expenses.  The amountand  method of restitution  and the nature and scope of
the recall will be determined  after further  hearings to be scheduled  before a
special master.

     Ford/Citibank  Visa Class Action.  Following the June 1997  announcement of
the termination of the Ford/Citibank credit card rebate program,  five purported
nationwide  class  actions and one purported  statewide  class action were filed
against Ford; Citibank is also a defendant in some of these actions. The actions
allege  damages in an amount up to $3,500  for each  cardholder  who  obtained a
Ford/Citibank credit card in reliance on the rebate program and who is precluded
from  accumulating  discounts  toward the purchase or lease of new Ford vehicles
after  December  1997 as a result  of the  termination  of the  rebate  program.
Plaintiffs  contend  that  defendants  deceptively  breached  their  contract by
unilaterally  terminating  the  program,  that  defendants  have  been  unjustly
enriched  as  a  result  of  the  interest   charges  and  fees  collected  from
cardholders, and further, that defendants conspired to deprive plaintiffs of the
benefits of their credit card agreement.  Plaintiffs seek compensatory  damages,
or  alternatively,  reinstatement of the rebate program,  and punitive  damages,
costs,  expenses,  and  attorneys'  fees. The five  purported  nationwide  class
actions were filed in state courts in Alabama,  Illinois,  New York, Oregon, and
Washington,  and the purported  statewide class action was filed in a California
state court. The Alabama court has conditionally certified a class consisting of
Alabama  residents.  Ford  removed  all of the  cases to  federal  court,  which
consolidated  and  transferred  the cases to  federal  court in  Washington  for
pretrial  proceedings.   In  October  1999,  the  federal  court  dismissed  the
consolidated  proceedings for lack of jurisdiction  and sent each action back to
the state court in which it originated.  We have appealed this ruling.  Briefing
on the appeal has been completed and we are awaiting oral argument.

     Lease  Residual  Class Action.  In January 1998, in connection  with a case
pending in Illinois state court, Ford and Ford Credit were served with a summons
and  intervention  counterclaim  complaint  relating  to Ford  Credit's  leasing
practices  (Higginbotham  v. Ford Credit).  The  counterclaim  plaintiff,  Carla
Higginbotham,  is a member of a class that has been conditionally  certified for
settlement  purposes in Shore v. Ford  Credit.  In the Shore  case,  Ford Credit
commenced an action for deficiency against Virginia Shore, a Ford Credit lessee.
Shore  counterclaimed  for  purported  violations  of the  Truth-in-Leasing  Act
(alleging that certain lease charges were  excessive)  and the  Truth-in-Lending
Act (alleging  that the lease lacked  clarity).  Shore  purported to represent a
class of all similarly situated lessees. Ford was not a party to the Shore case.
Higginbotham  objected to the proposed settlement of the Shore case,  intervened
as a named  defendant,  filed separate  counterclaims  against Ford Credit,  and
joined Ford as an additional counterclaim defendant. Higginbotham asserts claims
against  Ford Credit for  violations  of the Consumer  Leasing Act,  declaratory
judgment  concerning the enforceability of early termination  provisions in Ford
Credit's  leases,  and fraud.  She also asserts a claim  against Ford Credit and
Ford for  conspiracy  to violate  the  Truth-in-Lending  Act.  The  Higginbotham
counterclaims allege that Ford Credit inflates the residual values of its leased
vehicles,  which results in lower monthly lease payments but higher  termination
fees for lessees who  exercise  their right of early  termination.  Higginbotham
claims that the early  termination  fees were not  adequately  disclosed  on the
lease form and that the fees are excessive and illegal  because of the allegedly
inflated  residual  values.  She also  alleged  that Ford  dictated the residual
values to Ford Credit and thereby participated in an unlawful  conspiracy.  This
case was stayed pending the  approval/rejection of the settlement in Shore. Ford
Credit has reached individual settlements with the Shore plaintiffs.

     The Illinois court in Higginbotham  found that the lease end residual value
of Ms.  Higginbotham's  vehicle  was  properly  valued  and,  as a  result,  Ms.
Higginbotham was an inadequate representative for the class.  Subsequently,  Ms.
Higginbotham   voluntarily  dismissed  her  intervention   counterclaim  without
prejudice  in the  Illinois  state court and has  reactivated  her initial  suit
against  Ford  Credit  (Ford is no longer a party to this  suit) in the  Florida
federal court,  pursuing  substantially  similar claims on behalf of herself and
others similarly situated.  Consequently, the Higginbotham case is proceeding in
Florida and Ford Credit is in the process of responding  to discovery  requests.
In addition,  Ford Credit has filed a response to  Plaintiff's  motion for class
certification  and  has  renewed  its  motion  for  summary  judgment  based  on
information obtained in discovery.

     Retail Lessee Insurance  Coverage Class Action.  On May 24, 1999,  Michigan
Mutual  Insurance  Company was served with a purported class action complaint in
federal court in Florida  alleging that the

                                       24


Item 3.  Legal Proceedings (Continued)


Ford Commercial, General Liability and Business Automobile Insurance Policy, and
the Personal  Auto  Supplement to that policy,  provides  uninsured/underinsured
motorist  coverage  and  medical  payments  coverage  to retail  lessees of Ford
vehicles  (e.g., to Red Carpet  lessees).  The Company is required to defend and
indemnify Michigan Mutual. The complaint rests on an untenable interpretation of
the Michigan  Mutual policy,  which was intended to cover company cars and lease
evaluation vehicles.  Unfortunately,  however, the Florida Court of Appeals in a
prior  action  brought  by  a  single  individual,   has  accepted   Plaintiffs'
interpretation  of  the  policy.  The  Florida  court's  opinion  should  not be
controlling in federal court,  however,  and Ford has filed a motion for summary
judgment  based  on the  policy  language  and  the  intention  of the  parties.
Plaintiffs responded to Ford's motion, cross-moved for summary judgment in their
favor,  moved to amend their  complaint,  and moved for class  certification.  A
hearing on Ford's motion was held on October 27, 2000,  and we expect a decision
sometime in 2001.

     Throttle Body Assemblies Class Action. A purported  nationwide class action
has been filed in Ohio on behalf of all  persons  who own or lease 1999  Mercury
Villagers.  The complaint alleges that the vehicle has a defective throttle body
assembly that causes the gas pedal to intermittently lock or stick in the closed
position. The complaint alleges breach of warranty, negligence, and violation of
consumer protection statutes.  Plaintiffs seek an order requiring Ford to recall
the vehicles.  They also seek unspecified  compensatory damages, treble damages,
attorneys  fees,  and costs.  We are seeking to have the case removed to federal
court.

     Hertz Stock Offer Class  Actions.  Twelve class  actions have been filed in
Delaware  state  court on  behalf  of the  minority  shareholders  of The  Hertz
Corporation  against the Company,  The Hertz  Corporation,  and the directors of
Hertz,  alleging that the Company  breached its fiduciary duties to the minority
shareholders of Hertz by offering,  on September 20, 2000, $30 per share for the
remaining shares of Hertz stock not already owned by the Company. The plaintiffs
alleged that the price offered was unfair and inadequate,  was not negotiated at
arms  length and was  designed  to benefit  Ford by  "capping"  the value of the
stock, and would deny them the full value of their stock.  They sought to enjoin
or  rescind  the  transaction,  recover  damages  and  profits,  and an award of
attorneys' fees. These actions were consolidated on October 19, 2000. In January
2001,  we agreed  with a special  committee  of Hertz's  board of  directors  to
increase  our offer to $35.50 per share.  In March  2001,  through a cash tender
offer and merger transaction, we acquired the publicly held shares of Hertz and,
as a result, Hertz has become an indirect, wholly-owned subsidiary of Ford.

     Windstar  Transmission  Class Actions.  Three  purported  class actions are
pending,  alleging  that  Ford  marketed,  advertised,  sold,  and  leased  1995
Windstars in a deceptive manner by misrepresenting  their quality and safety and
actively  concealing  defects  in the  transmissions.  One  case is  pending  in
California (state court) and is limited to owners and lessees of that state. Two
cases are pending in Illinois  (one in federal court and one in state court) and
purport to represent owners and lessees from all states. Plaintiffs contend that
transmissions in the Windstar have prematurely  suffered from shifting  problems
and acceleration failures, requiring early replacement at substantial expense to
owners.  The cases assert  several  statutory and common law theories,  and seek
several types of relief,  including unspecified  compensatory damages,  punitive
damages,  and injunctive  relief. All three cases are in the very early stage of
litigation. Discovery has just begun in California, and has not yet begun in the
other two cases.

     Seat Back Class Actions.  Four purported  statewide class actions have been
filed in state  courts in  Maryland,  New  Hampshire,  New Jersey,  and New York
against Ford,  General Motors  Corporation and  DaimlerChrysler AG alleging that
seat backs with single recliner mechanisms are defective.  Plaintiffs in each of
these suits allege that seats installed in class vehicles (defined as almost all
passenger  cars  made  after  1991) are  defective  because  the seat  backs are
"unstable  and  susceptible  to  rearward  collapse  in the event of a  rear-end
collision.  The purported  class in each state consists of all persons who own a
class vehicle and specifically  excludes all persons who have suffered  personal
injury as a result of the rearward collapse of a seat.  Plaintiffs allege causes
of action for negligence,  strict liability,  implied warranty, fraud, and civil
conspiracy.  Plaintiffs  also  allege  violations  of  the  consumer  protection
statutes in the various states.  Plaintiffs seek "compensatory  damages measured
by the cost of  correcting  the  defect,  not to exceed  $5,000  for each  class
vehicle." Ford's motions to dismiss were granted in

                                       25


Item 3.  Legal Proceedings (Continued)


Maryland,  New Hampshire,  and New York;  plaintiffs' appeals from these rulings
are  pending in New York and  Maryland.  The trial  judge in the New Jersey case
denied Ford's motion to dismiss, and discovery is proceeding in that case.

     Ford Credit Debt  Collection  Class Actions.  Three class actions have been
filed  against  Ford  Credit  and PRIMUS  Automotive  Financial  Services,  Inc.
("PRIMUS") alleging unfair debt collection practices. In Pertuso v. Ford Credit,
a purported  nationwide  class  action,  plaintiffs  allege  that Ford  Credit's
policies and practices for obtaining  reaffirmation  agreements  violate Federal
law and constitute an unfair collection practice. This case was dismissed at the
trial  court  level  and  that  decision  was  upheld  by the  appellate  court.
Plaintiffs  have appealed to the United States Supreme  Court.  Molloy v. PRIMUS
and Dubois v. Ford Credit are two nationwide  class action  lawsuits  brought by
the same group of  plaintiff  attorneys.  Both  cases  allege  that Ford  Credit
attempts to collect on  discharged,  non-reaffirmed  debts in  violation  of the
Bankruptcy  Code,  the Fair  Debt  Collection  Practices  Act and the  Racketeer
Influenced and Corrupt  Organization  Act. In Molloy,  our motion to dismiss was
denied and we are proceeding  with  discovery.  In January 2001, the trial court
granted our motion to dismiss the Dubois case.  We  anticipate  that  plaintiffs
will appeal.

     Late Charges Class Actions.  There are two class actions, one in California
(Cumberland v. Ford Credit) and the other in Oklahoma (Crim v. Ford Credit),  in
which the  plaintiffs  are  contending  that Ford  Credit is  engaged  in unfair
business  practices by assessing  late  charges on lease  accounts  that bear no
reasonable  relation to our actual costs. In Cumberland (now captioned as Connie
Stickles et al. v. Ford Credit) the plaintiff has brought a purported nationwide
class  action  filed in the  Superior  Court of San  Francisco.  Plaintiffs  are
seeking  restitution,  punitive damages, and injunctive relief.  Basically,  the
claim  is  that  our  late  charge  of 7 1/2 % or $50,  whichever  is  less,  is
excessive.  There  has  been  extensive  discovery  and the  court  has  granted
nationwide  class  certification.  Trial is set to begin in the  second  quarter
2001.  However,  due to the unexpected death of our expert witness,  Ford Credit
has filed a motion for  continuance.  In Crim,  the  plaintiff  has made similar
allegations.  After granting a statewide class, the court granted our motion for
summary  judgment  because it found that the plaintiff had voluntarily  made the
late payments and was,  therefore,  precluded from bringing this action. We have
completed an extensive  study of the costs incurred by Ford Credit on delinquent
accounts and are confident that we can justify the late charge fee.

     Fair Lending Class Action.  Ford Credit has been served with a class action
lawsuit  in  federal  court in New York  alleging  that  our  pricing  practices
discriminate  against African  Americans.  Specifically,  plaintiffs allege that
although Ford Credit's initial credit risk scoring  analysis  applies  objective
criteria to calculate the  risk-related  "Buy Rate," Ford Credit then authorizes
dealers to impose a  subjective  component  in its credit  pricing  system - the
Mark-up  Policy - to  impose  additional  non-risk  charges.  It is the  alleged
subjective  mark-up  that  plaintiffs  allege   discriminates   against  African
Americans.  Ford  Credit  has filed a motion to  dismiss.  Ford and Ford  Credit
believe   that  Ford   Credit's   pricing   practices   are  fair  and  are  not
discriminatory.

     Performance  Management  Process Class Action. A purported class action was
filed in Wayne County Circuit Court in February 2001 against Ford, alleging that
the Company's  Performance  Management Process unlawfully  discriminates against
older  workers.  Individual  claims in that case allege  other forms of unlawful
discrimination.  This  case is in the  early  stage  of  litigation  and Ford is
preparing its response.

     Reverse  Discrimination Class Action. A purported class action was filed in
the Eastern  District of Michigan  in  February  2001  against  Ford and Jacques
Nasser,  President  and  Chief  Executive  Officer  of  Ford,  alleging  reverse
discrimination.  Plaintiffs  claim that the  Company's  diversity  policies  and
practices  discriminate  against  older white  males.  This case is in the early
stage of litigation and Ford is preparing its response.

                                       26


Item 3.  Legal Proceedings (Continued)


Other Matters
-------------

     Red Carpet  Lease  Terminations.  The  Florida  Attorney  General  issued a
subpoena  asking for all Ford Credit Red Carpet Lease ("RCL") early  termination
accounts going back to 1991. The Florida Attorney General has been investigating
leasing  practices  at the  dealership  level for years  and is  representing  a
consortium of 37 states.  The  investigation  focuses on whether Ford Credit RCL
customers  who want to terminate  leases  early and purchase the leased  vehicle
have been misled by the dealers' alleged  improper  failure to itemize:  (i) the
cost to terminating the lease, and (ii) the vehicle  purchase price.  They claim
that because  Ford Credit  requires  the  customer to early  terminate  with the
originating  dealer,  we are conspiring with our dealer to mislead the customer.
We believe that Ford Credit's business  practices are fair under applicable law,
and we are  attempting to negotiate a resolution of the matter.  There have been
numerous and extensive  meetings with most of the Attorneys  General involved in
the 37 state  consortium.  We are confident that an amicable  resolution of this
matter will be reached.


Item 4.  Submission of Matters to a Vote of Security Holders
------------------------------------------------------------

     Ford held a special meeting of the stockholders of the Company on August 2,
2000.  The Special  Meeting was held to allow the  stockholders  to consider and
vote on a  recapitalization  proposal  known as Ford's  Value  Enhancement  Plan
("VEP").  The  VEP,  which  was  effected  through  a merger  of a  wholly-owned
subsidiary  of Ford  into  Ford,  consisted  of the  exchange  by Ford  with its
stockholders  of cash and new  shares  of stock  for  existing  shares of stock,
resulting in a reshuffling  of the capital  structure of Ford.  The VEP proposal
was approved by the stockholders,  with 1,436,008,238  votes cast For (86.041%),
226,322,070  votes  cast  Against  (13.561%),   and  6,642,569  votes  abstained
(0.398%). There were no broker non-votes with respect to the proposal. Under the
VEP, Ford shareholders exchanged each of their old Ford common or Class B shares
for one new Ford  common or Class B share,  as the case may be,  plus,  at their
election,  either $20 in cash,  0.748  additional new Ford common  shares,  or a
combination of $5.17 in cash and 0.555  additional new Ford common shares.  As a
result of the  elections  made by  shareholders  under the VEP,  the total  cash
elected  was $5.7  billion  and the total  number of new Ford common and Class B
shares that became issued and outstanding was 1.893 billion.

                                       27






Item 4A. Executive Officers of Ford

     Our  executive  officers  and their  positions  and ages at March 15, 2001,
unless otherwise noted, are shown in the table below:

                                                                          Present Position
     Name                               Position                            Held Since                    Age
     ----                               --------                            ----------                    ---
                                                                                                  

Jacques Nasser*                  President and                             January 1999                    53
                                   Chief Executive Officer
                                   (also a Director)

W. Wayne Booker                  Vice Chairman                             November 1996                   66

James D. Donaldson               Group Vice President-                     January 2000                    58
                                   Global Business Development

Carlos E. Mazzorin               Group Vice President-                     January 2000                    59
                                   Global Purchasing and
                                   South America

James J. Padilla                 Group Vice President-                     January 2000                    54
                                   Global Manufacturing

Richard Parry-Jones              Group Vice President-                     January 2000                    49
                                   Global Product Development
                                   and Quality

Wolfgang Reitzle                 Group Vice President- Premier             March 1999                      51
                                   Automotive Group

Robert L. Rewey                  Group Vice President-                     January 2000                    62
                                   Global Consumer Services and
                                   North America

John M. Rintamaki                Group Vice President and                  January 2000                    59
                                   Chief of Staff

Henry D. G. Wallace              Group Vice President and                  January 2000                    55
                                   Chief Financial Officer

Elizabeth S. Acton               Vice President and Treasurer              October 2000                    49

Marvin W. Adams                  Vice President-Chief                      December 2000                   43
                                   Information Officer

Richard N. Beattie               Vice President-Investor                   September 2000                  46
                                   Relations

Gurminder S. Bedi                Vice President-                           January 2000                    53
                                   North American Truck

William W. Boddie                Vice President-                           January 2000                    55
                                   Global Core Engineering

                                       28


Item 4A.  Executive Officers of Ford (Continued)

                                                                          Present Position
     Name                               Position                            Held Since                    Age
     ----                               --------                            ----------                    ---

Mei Wei Cheng                    Vice President-                           January 1999                    51
                                   (President, Ford
                                   Motor (China) Ltd.)

Susan M. Cischke                 Vice President- Environmental January 2001                                47
                                   and Safety Engineering

William J. Cosgrove              Vice President                            July 1999                       55
                                   (Chief of Staff and Chief
                                   Financial Officer, Premier
                                   Automotive Group)

Terrell M. de Jonckheere         Vice President-Ford South                 January 2000                    56
                                   America Operations

Mark Fields                      Vice President                            December 1999                   39


Karen C. Francis**               Vice President -                          April 2001                      40
                                   ConsumerConnect

Louise K. Goeser                 Vice President-Quality                    March 1999                      47

Janet M. Grissom                 Vice President-                           January 1998                    51
                                   Washington Affairs

Elliott S. Hall                  Vice President-                           July 1998                       62
                                   Dealer Development

Lloyd E. Hansen                  Vice President and Controller             October 2000                    52

Earl J. Hesterberg               Vice President-                           June 1999                       47
                                   (Vice President, Marketing,
                                   Sales and Service, Ford of
                                   Europe, Inc.)

Mark W. Hutchins                 Vice President-                           July 1998                       55
                                   (President, Lincoln and Mercury)

I. Martin Inglis                 Vice President- Ford                      January 2000                    50
                                   North America

Michael D. Jordan                Vice President-                           January 1999                    54
                                   (President, Automotive Consumer
                                   Services Group)

Brian P. Kelley                  Vice President- Global                    March 2001                      40
                                   Consumer Services

Janet E. Klug                    Vice President - Global Marketing         March 2001                      41


Vaughn A. Koshkarian             Vice President-Ford Asia                  January 2000                    60
                                   Pacific Operations


                                       29


Item 4A.  Executive Officers of Ford (Continued)

                                                                           Present Position
     Name                               Position                            Held Since                    Age
     ----                               --------                            ----------                    ---

Roman J. Krygier              Vice President-                              January 1999                    58
                                   Powertrain Operations

Martin Leach                     Vice President-                           January 2000                    43

                                   (VP, Product Development,
                                   Ford of Europe, Inc.)

Kathleen A. Ligocki              Vice President-Mexico                     January 2001                    44
                                   (President and CEO)

Malcolm S. Macdonald             Vice President-Finance                    October 2000                    60
                                   and Treasury Matters

J.C. Mays                        Vice President-Design                     October 1997                    46

David L. Murphy                  Vice President-                           January 1999                    55
                                   Human Resources

James G. O'Connor                Vice President                            June 1998                       58
                                   (President, Ford Division)

Helen O. Petrauskas              Vice President-Environmental              March 1983                      56
                                   and Safety Engineering

Dennis E. Ross                   Vice President and                        October 2000                    50
                                   General Counsel

Shamel T. Rushwin                Vice President-Vehicle                    March 1999                      53
                                    Operations

Nicholas V. Scheele              Vice President-                           February 1999                   57
                                   (Chairman, Ford of Europe, Inc.)

Gerhard F. A. Schmidt**          Vice President - Research                 April 2001                      55

Anne Stevens**                   Vice President - North America            April 2001                      52
                                   Assembly Operations


Frank M. Taylor                  Vice President- Material                  July 1999                       53
                                   Planning and Logistics

Chris P. Theodore                Vice President- North                     January 2000                    50
                                   America Car

David W. Thursfield              Vice President-                           January 2000                    55
                                   (President and CEO,
                                   Ford of Europe, Inc.)

Alex P. Ver                      Vice President- Advanced                  January 2000                    54
                                   Manufacturing Engineering



                                       30


Item 4A.  Executive Officers of Ford (Continued)

                                                                          Present Position
     Name                               Position                            Held Since                    Age
     ----                               --------                            ----------                    ---


Jason H. Vines                   Vice President-                           February 2000                   41
                                   Communications

Donald A. Winkler                Vice President-                           October 1999                    52
                                   (Chairman and CEO, Ford
                                   Motor Credit Company)


James A. Yost                    Vice President-Strategy                   December 2000                   51

Martin B. Zimmerman              Vice President-                           January 1999                    54
                                   Governmental Affairs

Rolf Zimmermann**                Vice President - Craftsmanship            April 2001                      54
                                   and Launch, Ford of Europe


__________________
*    Also a member of the Finance  Committee and the  Nominating  and Governance
     Committee of the Board of Directors.
**   Appointment to be effective April 1, 2001.

     All of the above officers,  except those noted below, have been employed by
Ford or its  subsidiaries in one or more capacities  during the past five years.
Described  below  are  the  positions   (other  than  those  with  Ford  or  its
subsidiaries)  held by  those  officers  who  have  not  been  with  Ford or its
subsidiaries for five years:

o    Mr. Adams was Executive Vice President, Bank One Operations and Technology,
     Bank One from  February  1997  until  December  2000.  From June 1996 until
     February 1997 he was Chief Information  Officer of Frontier  Communications
     Corporation  and from April 1994 to June 1996 he served as President,  Bank
     One Financial Card Services Corporation.

o    Mr. Cheng was  President and Regional  Executive of GE  Appliances  Ltd. in
     Hong Kong from October 1996 until January 1998.  From  September 1994 until
     September 1996 he was President of General Electric China.

o    Ms. Cischke was Senior Vice President, Regulatory Affairs and Passenger Car
     Operations,  DaimlerChrysler  from October 1999 until  January  2001.  From
     December 1996 until September  1999, she served as Vice President,  Vehicle
     Certification, Compliance and Safety Affairs, DaimlerChrysler.

o    Ms. Francis was Managing  Director and Chief  Marketing  Officer,  Internet
     Capital Group from May 2000 until April 2001.  From 1998 until May 2000 she
     served as General Manager, Oldsmobile, General Motors Corporation.

o    Ms. Goeser served as General Manager,  Refrigeration Product Team Whirlpool
     Corporation,  Whirlpool North American Appliance Group, from September 1996
     until March 1999.  From January 1994 until  September  1996,  she served as
     Vice President, Corporate Quality, Whirlpool Corporation.

o    Ms. Ligocki served as Vice President,  Strategy and Worldwide Sales, United
     Technologies  Automotive  from February 1997 to August 1998. From June 1996
     to February 1997 she served as Vice President and General  Manager,  United
     Technologies  Motor  Systems.  From March 1996 to April 1996 she was Senior
     Vice President and Chief Financial  Officer,  Walt Disney  Imagineering and
     from October  1994 until March 1996 she served as  Director,  Manufacturing
     and Purchasing, United Technologies Carrier Corporation.

                                       31



Item 4A.  Executive Officers of Ford (Continued)

o    Mr.  Kelley  served as Vice  President  and  General  Manager for Sales and
     Distribution with General  Electric's  Appliance Division from January 1997
     until June 1999.  From January 1995 until January 1997 he served as General
     Manager,  Laundry Products,  General  Electric's  Appliance Division and as
     Marketing  Director,  GE  Brands  Worldwide,   General  Electric  Appliance
     Division from January 1994 until January 1995.

o    Ms. Klug served as Senior Vice  President,  Account  Director,  Lou Burnett
     Advertising  from 1997  until July  1998.  From 1994  until July 1997,  she
     served as Vice President, Account Director, Lou Burnett Advertising.

o    Mr.  Mays  was Vice  President  of  Design  Development  at SHR  Perceptual
     Management in Scottsdale,  Arizona from 1995 to October 1997. Prior to that
     he  was  design  director   responsible  for  worldwide   design  strategy,
     development and execution for Audi AG.

o    Dr. Reitzle served as a member of the Board of Management of BMW AG, Market
     and  Product  from March 1998 to  February  1999.  He served as Chairman of
     Rover Group Board from  October  1995 to March 1997 and was a member of the
     Board of Management of BMW AG, Research and  Development  from July 1987 to
     October 1995.

o    Mr.  Rushwin  served  as  Vice  President-International  Manufacturing  and
     Minivan Assembly Operations at DaimlerChrysler AG and its predecessors from
     October 1994 until March 1999.

o    Dr. Schmidt served as Senior Vice President,  Vehicle Integration, BMW from
     August  2000 until April 2001.  He  was Senior Vice  President,  Powertrain
     Development, BMW from 1990 until August 2000.

o    Mr.  Taylor was  Executive  Director,  Production  Control and  Logistics -
     General Motors Corporation Powertrain Group from March 1994 to July 1999.

o    Mr. Theodore most recently was Senior Vice  President-Platform  Engineering
     at  DaimlerChrysler  AG and its predecessors  from January 1998 until March
     1999. His prior positions at DaimlerChrysler AG were General  Manager-Small
     Car  Platform  Engineering  from 1996  through  December  1997 and  General
     Manager-Minivan Platform Engineering from 1992 through 1996.

o    Mr. Vines served as Vice President - External Affairs, Nissan North America
     from April 1998 until February 2000. From 1993 until 1995 while an employee
     of Chrysler  Corporation,  he served as Public Relations Executive with the
     American Automobile Manufacturers  Association.  From 1995 to April 1998 he
     held a variety of labor relations, domestic/international public relations,
     speechwriting   and  internal   communication   positions   with   Chrysler
     Corporation.

o    Mr.  Winkler was Chairman and CEO of Finance One, a finance  subsidiary  of
     Bank One  Corporation  and served as Executive  Vice  President of Bank One
     Corporation from 1993 to October 1999.

     Under Ford's By-Laws,  the  executive  officers are elected by the Board of
Directors at the Annual Meeting of the Board of Directors held for this purpose.
Each officer is elected to hold office  until his or her  successor is chosen or
as otherwise provided in the By-Laws.

                                       32




                                     PART II

Item 5. Market for Ford's Common Stock and Related Stockholder Matters
----------------------------------------------------------------------

     Our  Common  Stock  is  listed  on the New  York and  Pacific  Coast  Stock
Exchanges  in the United  States  and on certain  stock  exchanges  in  Belgium,
France, Germany, Switzerland and the United Kingdom.

     The table  below shows the high and low sales  prices for our Common  Stock
and the  dividends  we paid  per  share of  Common  and  Class B Stock  for each
quarterly period in 2000 and 1999.


                                                    2000                                         1999
                                  -----------------------------------------    ------------------------------------------
                                   First     Second     Third     Fourth        First      Second      Third     Fourth
                                  Quarter    Quarter   Quarter    Quarter      Quarter    Quarter     Quarter   Quarter
                                  -------    -------   -------    -------      -------    -------     -------   -------
                                                                                          
Common Stock price per share*
    High                            $30.33    $31.46     $29.88    $27.00        $36.54    $37.30      $32.22     $30.16
    Low                              22.12     23.08      23.63     21.69         30.36     28.92       25.42      26.65

Dividends per share of
   Common and Class B Stock*        $0.286    $0.286     $0.286    $0.30         $0.263    $0.263      $0.263     $0.286


___________________________
* New  York  Stock  Exchange  composite  interday  prices  as  provided  by  the
www.NYSEnet.com price history database. All prices and dividends prior to August
9, 2000 have been adjusted to reflect the effects of the Value  Enhancement Plan
and all prices prior to June 30, 2000 have been  adjusted to reflect the Visteon
spin-off.

     As of February 26, 2001,  stockholders  of record of Ford included  180,523
holders of Common Stock (which number does not include  38,743 former holders of
old Ford Common  Stock who have not yet tendered  their  shares  pursuant to the
VEP) and 109 holders of Class B Stock.

     During  2000,  we sold  500,520  shares  of our  Common  Stock  in  private
transactions   that  were  not  registered  with  the  Securities  and  Exchange
Commission.  These  transactions  were  exempt  from  registration  requirements
because they were private placements under Section 4(2) of the Securities Act of
1933, as amended.  These shares were sold in several,  unrelated transactions to
owners of an automotive dealership,  automotive recycling businesses,  and other
businesses in exchange for those  businesses.  The consideration we received for
the  shares  was  equal to the  market  value of the  shares  at the time of the
transactions.

                                       33



Item 6. Selected Financial Data
-------------------------------

     The  following  tables  set forth  selected  financial  data and other data
concerning  Ford for each of the last five years  (dollar  amounts in  millions,
except per share  amounts).  1996-1999  data  (except  employee  data) have been
restated to reflect Visteon as a discontinued operation.




SUMMARY OF OPERATIONS
                                                    2000           1999          1998          1997         1996
                                                    ----           ----          ----          ----         ----
                                                                                         
Automotive sector
Sales                                           $141,230       $135,073      $118,017      $121,976     $116,886
Operating income                                   5,226          7,214         5,567         6,164        1,928
Income before income taxes                         5,267          7,275         5,842         6,267        1,967
Net income                                         3,624          4,986         4,049         4,203        1,271

Financial Services sector
Revenues                                         $28,834        $25,585       $25,333       $30,692      $28,968
Income before income taxes                         2,967          2,579        18,438         3,857        4,222
Net income a/,b/,c/                                1,786          1,516        17,319         2,206        2,791

Total Company
Income before income taxes                        $8,234         $9,854       $24,280       $10,124      $ 6,189
Provision for income taxes                         2,705          3,248         2,760         3,436        1,943
Minority interests in net income of
  subsidiaries                                       119            104           152           279          184
                                                 -------        -------      --------      --------     --------
Income from continuing operations
   a/, b/, c/                                      5,410          6,502        21,368         6,409        4,062
Income from discontinued operation                   309            735           703           511          384
Loss on spin-off of discontinued operation        (2,252)             -             -             -            -
                                                 -------        -------       -------       -------      -------
Net income/(loss)                                $ 3,467        $ 7,237       $22,071       $ 6,920      $ 4,446
                                                 =======        =======       =======       =======      =======


Total Company Data Per Share of Common
and Class B Stock  d/

Basic:
Income/(loss) from continuing operations           $3.66          $5.38        $17.59         $5.32        $3.40
Income/(loss) before cumulative effects
   of changes in accounting principles              2.34           5.99         18.17          5.75         3.73
Net income/(loss)                                   2.34           5.99         18.17          5.75         3.73

Diluted:
Income/(loss) from continuing operations           $3.59          $5.26        $17.19         $5.20        $3.32
Income/(loss) before cumulative effects
   of changes in accounting principles              2.30           5.86         17.76          5.62         3.64
Net income/(loss)                                   2.30           5.86         17.76          5.62         3.64

Cash dividends e/                                  $1.80          $1.88         $1.72        $1.645        $1.47
Common stock price range (NYSE)
  High                                             31.46          37.30         33.76         18.34        13.59
  Low                                              21.69          25.42         15.64         10.95         9.94
Average number of shares of Common and
  Class B stock outstanding (in millions)          1,483          1,210         1,211         1,195        1,179

- - - - -
a/   1998 includes a non-cash gain of $15,955  million that resulted from Ford's
     spin-off of The Associates.
b/   1997 includes a gain of $269 million on the sale of Hertz Common Stock.
c/   1996 includes a gain of $650 million on the sale of The Associates'  Common
     Stock.
d/   Share data have been adjusted to reflect stock  dividends and stock splits.
     Common  stock price range  (NYSE) has been  adjusted to reflect the Visteon
     spin-off,  a recapitalization  known as our Value Enhancement Plan, and The
     Associates Spin-off.
e/   Adjusted  for the Value  Enhancement  Plan  effected in August  2000,  cash
     dividends were $1.16 per share in 2000.

                                       34


Item 6.  Selected Financial Data (Continued)

SUMMARY OF OPERATIONS
(continued)

                                                    2000           1999          1998          1997         1996
                                                    ----           ----          ----          ----         ----
Total Company Balance
  Sheet Data at Year-End

Assets
  Automotive sector                             $ 95,343       $ 99,201      $ 83,911      $ 80,339     $ 75,008
  Financial Services sector                      189,078        171,048       148,801       194,018      183,209
                                                --------       --------      --------      --------     --------
    Total assets                                $284,421       $270,249      $232,712      $274,357     $258,217
                                                ========       ========      ========      ========     ========
Long-term debt
  Automotive                                    $ 11,769       $ 10,398      $  8,589      $  6,964     $  6,385
  Financial Services                              87,118         67,517        55,468        73,198       70,641
Stockholders' equity                              18,610         27,604        23,434        30,787       26,765

Total Company Facility
  and Tooling Data
Capital expenditures for
  facilities (excluding
  special tools)                                $  5,315       $  4,332      $  4,369      $  4,906     $  4,529
Depreciation                                      12,915         11,846        10,890         9,865        9,070
Expenditures for special tools                     3,033          3,327         3,388         2,894        3,154
Amortization of special tools                      2,451          2,459         2,880         3,126        3,211

Total Company Employee
  Data - Worldwide
Payroll                                         $ 17,983       $ 18,390      $ 16,757      $ 17,187     $ 17,616
Total labor costs                                 25,653         26,881        25,606        25,546       25,689
Average number of employees                      345,991        374,093       342,545       363,892      371,702

Total Company Employee
  Data - U.S. Operations
Payroll                                         $ 11,203       $ 11,418      $ 10,548      $ 10,840     $ 10,961
Average number of employees                      163,236        173,045       171,269       189,787      189,718

Average hourly labor costs  f/
  Earnings                                      $  26.73       $  25.58      $  24.30      $  22.95     $  22.30
  Benefits                                         21.71          21.79         21.42         20.60        19.47
                                                --------       --------      --------      --------     --------
    Total hourly labor costs                    $  48.44       $  47.37      $  45.72      $  43.55     $  41.77
                                                ========       ========      ========      ========     ========
- - - - -

f/   Per hour worked (in dollars).  Excludes data for subsidiary companies.

                                       35


Item 6.  Selected Financial Data (Continued)



SUMMARY OF VEHICLE UNIT SALES a/
(in thousands)                                      2000           1999          1998          1997         1996
                                                    ----           ----          ----          ----         ----
                                                                                            
North America
    United States
      Cars                                         1,775          1,725         1,563         1,614        1,656
      Trucks                                       2,711          2,660         2,425         2,402        2,241
                                                   -----          -----         -----         -----        -----
      Total United States                          4,486          4,385         3,988         4,016        3,897

    Canada                                           300            288           279           319          258
    Mexico                                           147            114           103            97           67
                                                   -----          -----         -----         -----        -----
      Total North America                          4,933          4,787         4,370         4,432        4,222

Europe
    Britain                                          476            518           498           466          516
    Germany                                          320            353           444           460          436
    Italy                                            222            209           205           248          180
    Spain                                            180            180           155           155          155
    France                                           158            172           171           153          194
    Other countries                                  606            528           377           318          339
                                                   -----          -----         -----         -----        -----
      Total Europe                                 1,962          1,960         1,850         1,800        1,820

Other international
    Brazil                                           134            117           178           214          190
    Australia                                        125            125           133           132          138
    Taiwan                                            63             56            77            79           86
    Argentina                                         49             60            97           147           64
    Japan                                             26             32            25            40           52
    Other countries                                  132             83            93           103           81
                                                   -----          -----         -----         -----        -----
      Total other international                      529            473           603           715          611

Total worldwide vehicle
  unit sales                                       7,424          7,220         6,823         6,947        6,653
                                                   =====          =====         =====         =====        =====

- - - - -
a/   Vehicle unit sales generally are reported worldwide on a "where sold" basis
     and include sales of all Ford-badged  units, as well as units  manufactured
     by Ford and sold to other manufacturers.

                                       36



Item 7. Management's  Discussion and Analysis of Financial Condition and Results
--------------------------------------------------------------------------------
of Operations
-------------

In addition to specific  explanations  discussed below,  comparisons between our
2000 and 1999 fourth quarter and full year results are affected by the following
important events:

     o    On  August  7,  2000,   we   announced   the  final   results  of  our
          recapitalization,  known as our Value Enhancement Plan ("VEP"),  which
          became effective on August 2, 2000.  Under the VEP, Ford  shareholders
          exchanged  each of their old Ford Common or Class B shares for one new
          Ford  Common  or Class B share,  as the  case may be,  plus,  at their
          election, either $20 in cash, 0.748 additional new Ford Common shares,
          or a combination of $5.17 in cash and 0.555 additional new Ford Common
          shares.  As a result of the elections made by  shareholders  under the
          VEP,  the total cash  elected was $5.7 billion and the total number of
          new Ford Common and Class B shares that became issued and  outstanding
          was 1.893 billion.  See Note 3 of our Notes to Consolidated  Financial
          Statements  for a description of the effect of the VEP on earnings per
          share.

     o    On June 30, 2000,  we purchased  the Land Rover  business from the BMW
          Group.  Land Rover's  results and financial  condition are included in
          our financial  statements  on a  consolidated  basis  beginning in the
          third quarter of 2000.

     o    On June 28,  2000,  we  distributed  130  million  shares  of  Visteon
          Corporation,  which represented our 100% ownership interest,  by means
          of a tax-free  spin-off  in the form of a dividend  on Ford Common and
          Class B Stock. Visteon has been reflected as a discontinued  operation
          through June 30, 2000.  Our third and fourth  quarter 2000 results and
          financial condition exclude completely Visteon's results and financial
          condition.

     o    On March 31, 1999,  we purchased AB Volvo's  worldwide  passenger  car
          business  ("Volvo Car").  Volvo Car's results and financial  condition
          have been included in our financial statements on a consolidated basis
          since the second quarter of 1999.

FOURTH QUARTER 2000 RESULTS OF OPERATIONS

     Our worldwide net income was $1,077  million in the fourth quarter of 2000,
or $0.57 per diluted share of Common and Class B Stock. In the fourth quarter of
1999,  earnings from continuing  operations  were $1,711  million,  or $1.39 per
diluted  share.  Worldwide  sales and revenues  were $42.6 billion in the fourth
quarter of 2000, down $1.3 billion, reflecting primarily lower unit volume. Unit
sales of cars and trucks were  1,840,000  units,  down 79,000 units,  reflecting
primarily lower production in North America in response to weaker demand.

                                       37





Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operations (Continued)

     Results of our operations by business sector for the fourth quarter of 2000
and 1999 are shown below (in millions):


                                                                                    Fourth Quarter
                                                                                      Net Income
                                                                        ---------------------------------------
                                                                                                     2000
                                                                                                 Over/(Under)
                                                                           2000        1999          1999
                                                                        ---------- ------------ ---------------
                                                                                          
                  Automotive sector                                      $  629      $1,354        $(725)
                  Financial Services sector                                 448         357           91
                                                                         ------      ------        -----
                  Income from continuing operations                      $1,077      $1,711        $(634)

                  Income from discontinued operation                          -          95          (95)
                                                                         ------      ------        -----

                  Total Company net income                               $1,077      $1,806        $(729)
                                                                         ======      ======        =====



Automotive Sector
-----------------

     Worldwide  earnings  for our  Automotive  sector were  $629 million  in the
fourth quarter of 2000 on sales of $35.1 billion. Earnings in the fourth quarter
of 1999 were $1,354 million on sales of $37.3 billion.

     Details of our  Automotive  sector  earnings for the fourth quarter of 2000
and 1999 are shown below (in millions):


                                                                                    Fourth Quarter
                                                                                  Net Income/(Loss)
                                                                        ---------------------------------------
                                                                                                     2000
                                                                                                 Over/(Under)
                                                                           2000        1999          1999
                                                                        ---------- ------------ ---------------
                                                                                          
                  North American Automotive                               $  607      $1,474       $(867)

                  Automotive Outside North America
                  - Europe                                                    33         (30)         63
                  - South America                                            (31)       (100)         69
                  - Rest of World                                             20          10          10
                                                                          ------      ------       -----
                   Total Automotive Outside
                    North America                                             22        (120)        142
                                                                          ------      ------       -----

                     Total Automotive sector                              $  629      $1,354       $(725)
                                                                          ======      ======       =====


     The  decrease in our fourth  quarter  Automotive  sector  earnings in North
America  reflects  primarily  lower  industry  volume and market  share and less
favorable product mix.

     The  improved  fourth  quarter  results in Europe  reflect  continued  cost
reductions.  The improvement in South America reflects primarily cost reductions
and improved product mix.

                                       38


Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operations (Continued)


Financial Services Sector
-------------------------

     Details of our  Financial  Services  sector  earnings  are shown  below (in
millions):


                                                                                   Fourth Quarter
                                                                                  Net Income/(Loss)
                                                                        --------------------------------------
                                                                                                    2000
                                                                                                Over/(Under)
                                                                           2000        1999         1999
                                                                        ----------- ----------- --------------
                                                                                          
                  Ford Credit                                              $410        $309        $101
                  Hertz                                                      56          60          (4)
                  Minority Interests, Eliminations,
                   and Other                                                (18)        (12)         (6)
                                                                           ----        ----        ----

                     Total Financial Services sector                       $448        $357        $ 91
                                                                           ====        ====        ====

                  Memo: Ford's share of earnings in Hertz                  $ 45        $ 49        $ (4)


     Ford  Credit's  consolidated  net income in the fourth  quarter of 2000 was
$410  million,  up $101  million  or 33% from 1999.  The  increase  in  earnings
reflects  primarily higher volume and an improved net financing  margin,  offset
partially by higher credit losses.

     Earnings at Hertz in the fourth quarter of 2000 were  $56 million (of which
$45 million  was Ford's share),  compared with earnings of $60 million (of which
$49 million was Ford's share) a year ago. The profit decline reflects  increased
pricing competition in the U.S. car rental and equipment rental businesses.

FULL-YEAR 2000 RESULTS OF OPERATIONS

     Our worldwide  revenues  were $170.1  billion in 2000, up $9.4 billion from
1999. We sold 7,424,000  cars and trucks in 2000, up 204,000  units,  reflecting
primarily the addition of Land Rover and strong U.S. industry sales.

     Results of our operations by business  sector for 2000,  1999, and 1998 are
shown below (in millions):


                                                                                 Net Income/(Loss)
                                                                        -------------------------------------

                                                                           2000         1999         1998
                                                                        ------------ -----------  -----------
                                                                                          
                  Automotive sector                                      $ 3,624      $ 4,986      $ 4,049
                  Financial Services sector (excluding
                     The Associates)                                       1,786        1,516        1,187
                  Gain on spin-off of The Associates                           -            -       15,955
                  The Associates (net of Minority Interest)                    -            -          177*
                                                                         -------      -------      -------

                  Income from continuing operations                      $ 5,410      $ 6,502      $21,368

                  Income from discontinued operation                         309          735          703
                  Loss on spin-off of discontinued operation              (2,252)           -            -
                                                                         -------      -------      -------

                   Total Company net income                              $ 3,467      $ 7,237      $22,071
                                                                         =======      =======      =======
          _ _ _ _ _
                  * Through March 12, 1998

                                       39


Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operations (Continued)


     The  following  unusual  items were  included in our 2000,  1999,  and 1998
income from continuing operations (in millions):



                                                                           Automotive Sector
                                                       -----------------------------------------------------------
                                                                                              Rest       Total     Financial
                                                          North                  South         Of         Auto      Services
                                                         America     Europe     America      World       Sector      Sector
                                                       ----------- ---------- ------------ ----------- ----------- -----------
                                                                                                  
2000
----
- Asset impairment and restructuring costs for
   Ford brand operations in Europe in the
   second quarter                                                  $(1,019)                            $(1,019)
- Inventory-related profit reduction for Land
   Rover in the third quarter                          $   (13)        (76)                  $(17)        (106)
- Write-down of assets associated with the
   Nemak joint venture in the fourth quarter              (133)                                           (133)
                                                       -------     -------      -----        ----      -------      -------
 Total 2000 unusual items                              $  (146)    $(1,095)         -        $(17)     $(1,258)     $     -
                                                       =======     =======      =====        ====      =======      =======
------------------------------------------------------------------------------------------------------------------------------
1999
----
- Gain from the sale of our interest in
   AutoEuropa to Volkswagen AG in the first
   quarter                                                         $   165                             $   165
- Inventory-related profit reduction for Volvo
   Car in the second quarter                           $   (16)       (125)                  $ (5)        (146)
- Visteon-related postretirement adjustment in
   the third quarter (incl. in Total Auto sector)                                                         (125)
- Employee separation costs in the third
   Quarter                                                 (79)                                            (79)     $   (23)
- Lump-sum payments relating to ratification of
   the 1999 United Auto Workers and Canadian
   Auto Workers contracts in the fourth
   quarter                                                 (80)                                            (80)
                                                       -------     -------      -----        ----      -------      -------
 Total 1999 unusual items                              $  (175)    $    40          -        $ (5)     $  (265)     $   (23)
                                                       =======     =======      =====        ====      =======      =======
------------------------------------------------------------------------------------------------------------------------------
1998
----
- Non-cash gain from our spin-off of
   The Associates in the first quarter                                                                              $15,955
- Employee separation costs in the fourth
   Quarter                                             $  (225)    $  (135)      $(81)                 $  (441)          (6)
- Write-off of our net exposure in Kia Motors
   Company in the fourth quarter                           (42)                              $(44)         (86)
- Charge in the fourth quarter to transfer our
   Batavia, Ohio transmission plant to a new
   joint venture company formed by
   ZF Friedrichshafen AG and us to manufacture
   continuously variable transmissions                     (73)                                            (73)
                                                       -------     -------       ----        ----      -------      -------
 Total 1998 unusual items                              $  (340)    $  (135)      $(81)       $(44)     $  (600)     $15,949
                                                       =======     =======       ====        ====      =======      =======

Excluding these unusual items, income from continuing operations would have been
$6,668 million in 2000,  compared with $6,790 million in 1999 and $6,019 million
in 1998.

                                       40


Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operations (Continued)


     We established and communicated the financial  milestones  listed below for
2000.  Our  results  against  these  milestones,  excluding  the  unusual  items
described above, are listed below.



                                2000 Milestone                            Actual Result          Over/(Under) 1999
                                --------------                            -------------          -----------------
                                                                                         

     Total Company
     -------------
     - Total Shareholder
         Returns                Top quartile of S&P 500 over time              -16%
     - Revenue                  Grow $5 billion                              $170 billion                  $9 billion

     Automotive
     ----------
     - North America            Record earnings                            $5,032 million              $(563) million
     - Europe                   Improve results                             $(35) million               $(45) million
     - South America            Improve results                            $(240) million                $204 million
     - Rest of World            Improve results                              $125 million                 $35 million
     - Total Costs              Reduce $1 billion                            $500 million
     - Capital Spending         $8 billion (excluding Visteon)               $7.4 billion                $0.3 billion
     - Visteon                  Achieve independence                      Spun-off June 28, 2000

     Financial Services
     ------------------
     - Ford Credit              Grow earnings 10%                          $1,536 million               +22%
                                Improve return on equity                      13.1%                  1.6 points
     - Hertz                    Record earnings                              $358 million           $22 million



AUTOMOTIVE SECTOR RESULTS OF OPERATIONS

     Details of our Automotive  sector earnings from  continuing  operations for
2000, 1999, and 1998 are shown below (in millions):


                                                                                 Net Income/(Loss)
                                                                        ------------------------------------

                                                                           2000        1999        1998
                                                                        ---------- ------------ ------------
                                                                                         
                  North American Automotive                              $ 4,886      $5,418      $3,997

                  Automotive Outside North America
                  - Europe                                                (1,130)         50         151
                  - South America                                           (240)       (444)       (278)
                  - Rest of World                                            108          87         179
                                                                         -------      ------      ------
                   Total Automotive Outside
                    North America                                         (1,262)       (307)         52

                  Visteon-related postretirement adjustment                    -        (125)          -
                                                                         -------      ------      ------

                     Total Automotive sector                             $ 3,624      $4,986      $4,049
                                                                         =======      ======      ======


2000 Compared with 1999
-----------------------

     Worldwide  earnings from  continuing  operations for our Automotive  sector
were  $3,624  million in 2000 on sales of  $141 billion,  compared  with  $4,986
million in 1999 on sales of $135  billion.  The  decrease in  earnings  reflects
asset impairment and restructuring charges in Europe and lower earnings in North
America,  offset  partially by improved  results in South America.  Adjusted for
constant  volume and mix,  our total  costs in the  Automotive  sector  declined
$500 million compared with 1999.

     Our Automotive sector earnings from continuing  operations in North America
were $4,886  million in 2000 on sales of $103.9  billion,  compared  with $5,418
million in 1999 on sales of $99.2 billion. The earnings  deterioration  reflects
primarily  costs  associated  with the Firestone tire recall and higher warranty


                                       41


Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operations (Continued)

costs related to our 3.8 liter engine, offset partially by increased volume. The
after-tax return on sales for our Automotive sector in North America was 4.8% in
2000, down 7/10 of a percentage point from 1999.

     In 2000,  approximately  17.8  million new cars and trucks were sold in the
United States, up from 17.4 million units in 1999. Our share of those unit sales
was 23.7% in 2000, down 1/10 of a percentage point from a year ago.

     Our Automotive  sector losses in Europe were $1,130 million from continuing
operations  in 2000,  compared  with  earnings  of $50  million a year ago.  The
decline  reflects  primarily  the second  quarter 2000 charge of $1,019  million
related to asset  impairment and  restructuring  costs for Ford brand operations
(see Note 19 of our Notes to Consolidated Financial Statements).

     In 2000,  approximately  17.8  million new cars and trucks were sold in our
nineteen  primary  European  markets,  down from 18.2 million units in 1999. Our
share of those unit sales was 10% in 2000, down 2/10 of a percentage  point from
a year ago,  reflecting  primarily  an increase in market  share  related to our
acquisitions  of Volvo Car and Land Rover,  offset by a decrease in market share
of Ford brand. The decrease in our Ford brand share reflects primarily continued
aggressive competition.

     Our  Automotive  sector in South America lost $240 million from  continuing
operations  in  2000,  compared  with  a loss  of  $444  million  in  1999.  The
improvement  reflects  primarily  higher  vehicle  margins  resulting  from cost
reductions and improved product mix and pricing.

     In 2000, approximately 1.5 million new cars and trucks were sold in Brazil,
compared  with 1.3  million  in 1999.  Our share of those unit sales was 9.1% in
2000,  down 6/10 of a  percentage  point from a year ago.  The decline in market
share reflects increased competition.

     Automotive  sector  earnings  from  continuing   operations  outside  North
America,  Europe, and South America ("Rest of World") were $108 million in 2000,
compared with earnings of $87 million in 1999.

     New car and truck sales in Australia,  our largest market in Rest of World,
were approximately 788,000 units in 2000, essentially unchanged from a year ago.
In 2000,  our combined car and truck market share in Australia  was 15.4%,  down
1.1  percentage  points  from  1999,  reflecting  primarily  strong  competitive
pressures.

1999 Compared with 1998
-----------------------

     Worldwide  earnings from  continuing  operations for our Automotive  sector
were  $4,986  million in 1999 on sales of $135  billion,  compared  with  $4,049
million in 1998 on sales of $118  billion.  The  increase in earnings  reflected
improved  results in North  America,  offset  partially by lower earnings in all
other geographic markets.  Adjusted for constant volume and mix, our total costs
in the Automotive sector declined $1 billion compared with 1998.

     Our Automotive sector earnings from continuing  operations in North America
were  $5,418  million in 1999 on sales of $99.2  billion,  compared  with $3,997
million in 1998 on sales of $86.7 billion.  The earnings  improvement  reflected
primarily  increased  sales  volume,  an improved mix of light trucks and luxury
cars,  lower costs,  and the  non-recurrence  of 1998's  unusual  items,  offset
partially  by  higher  interest  expense,   lump-sum  payments  related  to  the
ratification  of  union  contracts  in  1999,  and  costs  related  to  employee
separation  programs in 1999.  The after-tax  return on sales for our Automotive
sector in North  America was 5.5% in 1999,  up 8/10 of a  percentage  point from
1998.

     In 1999,  approximately  17.4  million new cars and trucks were sold in the
United States,  up from 16 million  units in 1998. Our share of those unit sales
was  23.8%,  down 8/10 of a  percentage  point.  The

                                       42


Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operations (Continued)

decrease in market share reflected primarily capacity constraints on several key
products due to strong demand in the United States market.

     Our Automotive  sector earnings from  continuing  operations in Europe were
$50 million in 1999,  $101 million  worse than in 1998.  The  deterioration  was
explained by lower market share for Ford-branded vehicles,  primarily Mondeo and
Fiesta,  and unfavorable  vehicle mix, offset partially by the non-recurrence of
employee  separation  costs in 1998, lower taxes, the impact of unusual items in
1999, and the addition of Volvo Car.

     In 1999,  approximately  18.2  million new cars and trucks were sold in our
nineteen primary European markets, up from 17.2 million units in 1998. Our share
of those unit sales was 10.2% in 1999,  up 2/10 of a  percentage  point from the
prior year. The increase in our share was more than explained by the addition of
Volvo Car.

     Our  Automotive  sector in South America lost $444 million from  continuing
operations in 1999, compared with losses of $278 million in 1998. The decline in
earnings reflected primarily lower industry sales, lower market share in Brazil,
weak economic conditions,  devaluation of the Brazilian currency,  and increased
competition,  offset partially by lower costs and the non-recurrence of employee
separation costs in 1998.

     In 1999, approximately 1.3 million new cars and trucks were sold in Brazil,
compared  with 1.6  million  in 1998.  Our share of those unit sales was 9.7% in
1999, down 3.4 percentage points from 1998, reflecting increased competition.

     Automotive sector earnings from continuing operations in Rest of World were
$87  million in 1999,  down $92  million  from  1998.  The  decline in  earnings
reflected primarily higher taxes and lower sales volume, offset partially by our
share of the profit  improvement at Mazda and the  non-recurrence of a write-off
of our net exposure to Kia Motors Company in 1998.

     New car and truck sales in Australia,  our largest market in Rest of World,
were  approximately  787,000  units in 1999,  down 3% from  1998.  In 1999,  our
combined  car and  truck  market  share in  Australia  was  16.5%,  up 4/10 of a
percentage point.


FINANCIAL SERVICES SECTOR RESULTS OF OPERATIONS

     Earnings  of  our  Financial  Services  sector  consist  primarily  of  two
segments,  Ford  Credit and  Hertz.  Details of our  Financial  Services  sector
earnings for 2000, 1999, and 1998 are shown below (in millions):


                                                                        Net Income/(Loss)
                                                                -----------------------------------
                                                                   2000        1999        1998
                                                                ----------- ---------- ------------
                                                                                
                  Ford Credit                                    $1,536      $1,261      $ 1,084
                  Hertz                                             358         336          277
                  Minority Interests, Eliminations,
                   and Other                                       (108)        (81)        (174)
                                                                 ------      ------      -------
                     Financial Services (excluding
                       The Associates)                            1,786       1,516        1,187
                  The Associates (net of Minority Interest)           -           -          177*
                  Gain on spin-off of The Associates                  -           -       15,955
                                                                 ------      ------      -------

                     Total Financial Services sector             $1,786      $1,516      $17,319
                                                                 ======      ======      =======

                  Memo: Ford's share of earnings in Hertz        $  292      $  273      $   224

                  _ _ _ _ _
                  * Through March 12, 1998

                                       43


Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operations (Continued)


2000 Compared with 1999
-----------------------

     Ford Credit's  consolidated net income in 2000 was $1,536 million,  up $275
million or 22% from 1999.  Compared with 1999, the increase in earnings reflects
primarily  improved net  financing  margins and a higher  level of  receivables,
offset partially by higher credit losses and operating costs.

     Earnings  at Hertz in 2000 were $358  million  (of which $292  million  was
Ford's  share).  In 1999,  Hertz had  earnings  of $336  million  (of which $273
million was Ford's share).  The increase in earnings  reflects  primarily strong
volume-related  performance,  offset  partially by downward pricing pressure and
higher interest costs.

1999 Compared with 1998
-----------------------

     Ford Credit's  consolidated net income in 1999 was $1,261 million,  up $177
million or 16% from 1998. Compared with 1998, the increase in earnings reflected
primarily higher financing volumes and improved credit loss performance,  offset
partially  by  increased  operating  costs.  Higher  operating  costs  reflected
primarily  operating  costs of recent  acquisitions,  costs  associated with the
restructuring of financing operations, and employee separation programs.

     Earnings  at Hertz in 1999 were $336  million  (of which $273  million  was
Ford's  share).  In 1998,  Hertz had  earnings  of $277  million  (of which $224
million was Ford's share). The increase in earnings  reflected  primarily strong
demand,   improved  car  rental   pricing,   and  continuing   cost   efficiency
improvements.


LIQUIDITY AND CAPITAL RESOURCES

Automotive Sector
-----------------

     At December 31, 2000, our  Automotive  sector had $16.5 billion of cash and
marketable  securities,  down $5.2  billion from  December  31, 1999,  more than
explained by distributions for the Value Enhancement Plan ($5.6 billion),  share
repurchases ($1.1 billion), and acquisitions ($2.7 billion,  mainly Land Rover).
In addition to the cash on the balance  sheet,  we pre-funded  certain  employee
health benefit obligations in a Voluntary Employee Beneficiary Association trust
totaling  $3.7  billion at December  31,  2000.  In the first  quarter and early
second  quarter of 2001,  we expect to incur cash  outlays of  approximately  $5
billion for employee compensation payments (primarily profit sharing), the final
payment to AB Volvo for our acquisition of Volvo Car, share repurchases, and our
acquisition of the minority interest in Hertz.

     In 2000,  we spent $7.4  billion  for  capital  goods,  such as  machinery,
equipment,  tooling,  and facilities,  used in our Automotive sector. This is up
$324 million from 1999, reflecting primarily the addition of Land Rover. Capital
expenditures were 5.2% of sales in 2000, unchanged from a year ago.

     Our  stockholders'  equity was $18.6 billion at December 31, 2000,  down $9
billion  compared with December 31, 1999. This decrease  reflects  primarily the
Value  Enhancement  Plan,  cash  dividends,  the  Visteon  spin-off,  the  share
repurchase  program,  and a reduction in other  comprehensive  income reflecting
foreign currency translation  adjustments related primarily to the strengthening
of the U.S.  dollar  relative to European  currencies,  offset  partially by net
income.

     At December 31, 2000, our Automotive  sector had total debt of $12 billion,
up $300 million. Debt at year-end 2000 was 39% of our total capitalization (that
is, the sum of our stockholders' equity and Automotive debt),  compared with 30%
of total capitalization at year-end 1999. The increase reflected primarily lower
stockholders' equity, as explained above.


                                       44


Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operations (Continued)

     For a discussion of the credit and other financial  support  facilities for
our  Automotive  sector at December  31,  2000,  see Note 13 (page FS-22) of our
Notes to Consolidated Financial Statements.

Financial Services Sector
-------------------------

     At December 31, 2000, our Financial Services sector had cash and marketable
securities totaling $1.5 billion, down $111 million from December 31, 1999.

     Finance  receivables  and net  investment  in operating  leases were $171.8
billion  at  December 31, 2000,   up  $16.0  billion  from  December 31,   1999,
reflecting higher volume.

     Total debt was $153.5  billion at December 31, 2000,  up $13.6 billion from
December 31,  1999.  Outstanding  commercial  paper at December 31, 2000 totaled
$42.3  billion  at Ford  Credit  and $2.3  billion  at  Hertz,  with an  average
remaining maturity of 35 days and 18 days, respectively.

     For a discussion of the credit and other financial  support  facilities for
our Financial Services sector at December 31, 2000,  see Note 13 (page FS-22) of
our Notes to Consolidated Financial Statements.


HERTZ PURCHASE

     In March 2001, through a tender offer and a merger transaction, we acquired
(for a total price of about $750  million) the common stock of Hertz that we did
not own, which  represented  about 18% of the economic  interest in Hertz.  As a
result, Hertz has become an indirect, wholly-owned subsidiary.


NEW ACCOUNTING STANDARD

     We will adopt  Statement  of  Financial  Accounting  Standards  (SFAS) 133,
"Accounting  for  Derivative  Instruments  and Hedging",  on January 1, 2001, as
described  in  Note 1  (page  FS-10)  of our  Notes  to  Consolidated  Financial
Statements.


OUTLOOK

Industry Sales Volumes
----------------------

Our outlook for car and truck (including heavy trucks) industry sales in 2001 in
our major markets is as follows:



                   
      United States - between 16.0 million and 16.5 million units, compared with the 17.8 million units
                      sold in 2000

      Europe        - approximately 17.7 million units, compared with the 17.8 million units sold in 2000
                      (both figures based on 19 markets)

      Brazil        - approximately 1.6 million units, compared with the 1.5 million units sold in 2000

      Australia     - approximately 780,000 units, compared with the 788,000 units sold in 2000



                                       45




Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operations (Continued)


2001 Financial Milestones
-------------------------

     We have set and communicated  certain financial  milestones for 2001. While
we hope to achieve these goals,  they should not be interpreted as  projections,
expectations or forecasts of 2001 results. The financial milestones for 2001 are
as follows:


                                                      2001 Milestone
                                                      --------------
                                                   
        Total Company
        -------------
        - Total Shareholder Returns                   Top quartile of S&P 500 over time
        - Revenue                                     Grow $5 billion

        Automotive
        ----------
        - North America                               Achieve 4%+ return on sales
        - Europe                                      Achieve 1%+ return on sales
        - South America                               Improve results
        - Rest of World                               Achieve profitability
        - Total Costs                                 Reduce $1 billion (at constant volume and mix)
        - Capital Spending                            Contain at $8 billion or less

        Financial Services
        ------------------
        - Ford Credit                                 Improve returns
                                                      Grow earnings 10%


Risk Factors
------------

     Statements  included or  incorporated  by reference  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:  greater price
competition  in the  U.S.  and  Europe  resulting  from  currency  fluctuations,
industry overcapacity or other factors; a significant decline in industry sales,
particularly  in the United States or Europe,  resulting  from slowing  economic
growth; market acceptance of our new products;  currency fluctuations;  economic
difficulties in South America or Asia;  higher fuel prices;  a market shift from
truck sales in the United  States;  lower-than-anticipated  residual  values for
leased  vehicles;  labor or other  constraints on our ability to restructure our
business;  increased  safety or emissions  regulation  resulting in higher costs
and/or sales  restrictions;  work stoppages at key Ford or supplier  facilities;
and the  discovery  of  defects  in  vehicles  resulting  in delays in new model
launches, recall campaigns, increased warranty costs or litigation.

                                       46



Item 7A.  Quantitative and Qualitative Disclosures About Market Risk
--------------------------------------------------------------------

OVERVIEW

     We are  exposed  to a variety  of market  and asset  risks,  including  the
effects of  changes  in  foreign  currency  exchange  rates,  commodity  prices,
interest rates, and specific asset risks.  These risks affect our Automotive and
Financial Services sectors differently. We monitor and manage these exposures as
an integral part of our overall risk management  program,  which  recognizes the
unpredictability  of markets and seeks to reduce the potentially  adverse effect
on our results.

     The effect of changes in exchange  rates,  commodity  prices,  and interest
rates on our earnings  generally  has been small  relative to other factors that
also  affect  earnings,  such as unit  sales  and  operating  margins.  For more
information  on these  financial  exposures,  see Notes 1 and 18 of our Notes to
Consolidated Financial Statements.

     The market  risks of our  Automotive  sector and the market and other risks
and capital adequacy of Ford Credit,  which comprises  substantially  all of our
Financial Services sector, are discussed and quantified below.


Automotive Market Risk

     Our Automotive sector frequently has expenditures and receipts  denominated
in foreign currencies,  including the following: purchases and sales of finished
vehicles and production  parts; debt and other payables;  subsidiary  dividends;
and investments in affiliates.  These expenditures and receipts create exposures
to  changes  in  exchange  rates.  We also are  exposed  to changes in prices of
commodities used in our Automotive sector.

Foreign Currency Risk
---------------------

     We use derivative  financial  instruments to hedge assets,  liabilities and
firm  commitments  denominated  in foreign  currencies.  Our  hedging  policy is
defensive,  based on clearly  defined  guidelines.  Speculative  actions are not
permitted. We do not use complex derivative instruments.  We use a value-at-risk
("VAR")  analysis  to  evaluate  our  exposure  to changes  in foreign  currency
exchange rates. The primary assumptions used in the VAR analysis are as follows:

     o    A Monte Carlo  simulation  model is used to  calculate  changes in the
          value of currency derivative  instruments (e.g., forwards and options)
          and all significant underlying exposures. The VAR analysis includes an
          18-month  exposure  and  derivative  hedging  horizon  and a one-month
          holding period.

     o    The  VAR  analysis   calculates  the  potential  risk,  within  a  99%
          confidence  level,  on  cross-border  currency  cash  flow  exposures,
          including the effects of foreign  currency  derivatives.  (Translation
          exposures  are not  included  in the VAR  analysis).  The Monte  Carlo
          simulation model uses historical  volatility and correlation estimates
          of the  underlying  assets to produce a large  number of future  price
          scenarios which have a statistically lognormal distribution.

     o    Estimates of correlations  and  volatilities  are drawn primarily from
          the JP Morgan RiskMetricsTM datasets.

                                       47



Item 7A.  Quantitative and Qualitative Disclosures About Market Risk (Continued)


     Based on our overall currency  exposure  (including  derivative  positions)
during  2000,  the risk  during  2000 to our  pre-tax  cash flow  from  currency
movements was on average less than $300 million, with a high of $350 million and
a low of $275 million. At December 31, 2000, currency movements are projected to
affect our pre-tax cash flow over the next 18 months by less than $300  million,
within a 99%  confidence  level.  Compared  with our  projection at December 31,
1999,  the 2000 VAR  amount is  approximately  $125  million  higher,  primarily
because of  significantly  increased  currency  exchange rate volatility and the
inclusion of Land Rover currency exposures and hedges.

Commodity Price Risk
--------------------

     We enter into commodity  forward and option  contracts.  Such contracts are
executed to offset our  exposure to the  potential  change in prices  mainly for
various  non-ferrous  metals  (e.g.,  aluminum)  used  in the  manufacturing  of
automotive components. The fair value liability of such contracts, excluding the
underlying  exposures,  as of December 31, 2000 and 1999 was  approximately  $56
million and $223 million,  respectively.  The potential change in the fair value
of  commodity  forward  and  option  contracts,  assuming  a 10%  change  in the
underlying commodity price, would be approximately $280 million and $300 million
at December 31, 2000 and 1999, respectively. This amount excludes the offsetting
impact  of  the  price  change  in  the  physical  purchase  of  the  underlying
commodities.


FORD CREDIT MARKET AND OTHER RISKS

     In the normal  course of business,  Ford Credit is exposed to several types
of risk. These risks include primarily credit, residual, interest rate, currency
and liquidity risks. Each form of risk is uniquely managed in the context of its
contribution  to Ford  Credit's  overall  global risk.  Business  decisions  are
evaluated on a risk-adjusted basis and products are priced consistent with these
risks.

     Following is a discussion of Ford Credit's risk  management  practices used
to manage more than 90% of Ford Credit's  worldwide net finance  receivables and
operating leases, which equaled $122.7 billion and $38.5 billion,  respectively,
at December 31, 2000, and essentially all liabilities and equity. Ford Credit is
continuously reviewing and improving its risk management practices and extending
these risk management practices to its remaining portfolio around the world.

Credit Risk
-----------

     Credit risk is the  possibility  of loss from a customer's  failure to make
payments  according to contract terms.  Ford Credit actively manages credit risk
of consumer and non-consumer products to balance the level of risk and return.

Consumer Credit

     Retail products (vehicle  installment sale and lease contracts) are divided
into more than 75 segments by risk tier,  term and whether the vehicle  financed
is new or used.  This segment  data are used to assist with  product  pricing to
ensure risk factors are  appropriately  considered.  Data  segmentation is  also
used in contract  servicing  to make certain that  contracts  receive  attention
appropriate to their risk level. In addition,  Ford Credit is reorganizing  into
regional service centers to streamline retail customer service activities and to
realize economies of scale from the latest servicing technology.

     Credit  investigations  include a credit  bureau  review of each  applicant
together with an internal review and  verification  process.  Retail credit loss
management  strategy is based on  historical  experience of more than 15 million
contracts.  Statistically-based  retail  credit risk  rating  models are used to
determine the  creditworthiness  of applicants.  The accuracy of these models is
reviewed and revalidated  quarterly against actual performance and recalibrated,
as necessary.

                                       48



Item 7A.  Quantitative and Qualitative Disclosures About Market Risk (Continued)


     Ford  Credit  has  developed  behavioral  models to  assist in  determining
optimal  collection  strategies.  Accounts  are  placed in risk  categories  for
collection  follow-up.  Reasonable  efforts  are made to collect  on  delinquent
accounts and keep accounts current.  Repossession is considered a last resort. A
repossessed  vehicle is sold and proceeds are applied to the amount owing on the
receivable.   Ford's  Vehicle   Remarketing   Department  manages  the  sale  of
repossessed vehicles, seeking the highest net price for the vehicle.  Collection
of the remaining balance continues after  repossession until the account is paid
in full or is deemed uncollectible by Ford Credit.

Non-Consumer Credit

     Ford Credit extends non-consumer credit primarily to vehicle dealers in the
form of  approved  lines  of  credit  to  purchase  inventories  of new and used
vehicles. In addition, Ford Credit provides mortgage,  working capital and other
types  of  loans  to  dealers.   Ford  Credit  also  provides  state  and  local
governments,  leasing and daily  rental  companies  as well as other  commercial
entities with financing for their automotive needs.

     Each  non-consumer  loan  is  evaluated,   taking  into  consideration  the
borrower's  financial  condition,   collateral,  debt  servicing  capacity,  and
numerous  other  financial and  qualitative  factors.  All credit  exposures are
reviewed at least annually with special loan committees  reviewing higher credit
exposures.

     To monitor potential credit  deterioration,  dealers are required to submit
monthly  financial  statements.  An evaluation rating is assigned to each dealer
and physical audits of vehicle inventory are performed periodically, with higher
audit  frequency  for higher risk  dealers.  In  addition,  inventory  financing
payoffs are monitored  daily to detect  adverse  deviations  from typical payoff
patterns, in which case appropriate actions are taken.

Residual Risk
-------------

     Residual risk is the possibility that the actual proceeds  realized by Ford
Credit upon the sale of returned  vehicles  at lease  termination  will be lower
than the internal forecast of residual values.

     In general, lease contracts are written with vehicle lease-end values based
on Automotive Leasing Guide (ALG) residual  guidelines.  For financial reporting
purposes,  however,  Ford Credit sets the  internal  value of expected  residual
values  (net of  costs)  based on a  proprietary  econometric  model  that  uses
historical experience and forward-looking  information available to Ford Credit.
This  information  includes new product  plans,  marketing  programs and quality
metrics.  Any  unfavorable  gap between  Ford  Credit's  internal  forecast  and
contract  lease-end  value is  reserved on the  balance  sheet as  depreciation.
Reserve  adequacy  is reviewed  quarterly  to reflect  changes in the  projected
values.

     At lease  termination,  Ford Credit maximizes residual proceeds through the
use of models to  determine  which  geographic  market  would  yield the highest
resale value, net of transportation cost. Lease extensions or early terminations
also may be offered to take advantage of seasonal resale patterns.

Financial Market Risk
---------------------

     The goal of  financial  market  risk  management  is to reduce  the  profit
volatility  effect of changes in interest  rates and  currency  exchange  rates.
Interest rate and currency exposures are monitored and managed by Ford Credit as
an integral part of its overall risk management  program,  which  recognizes the
unpredictability  of  financial  markets and seeks to reduce  potential  adverse
effects on Ford  Credit's  operating  results.  Risk is reduced in two ways:  1)
through the use of funding  instruments that have interest and maturity profiles
similar to the assets they are funding,  and 2) through the use of interest rate
and  foreign  exchange  derivatives.   Ford  Credit's  derivatives  strategy  is
defensive; derivatives are not used for speculative purposes.

                                       49


Item 7A.  Quantitative and Qualitative Disclosures About Market Risk (Continued)


Interest Rate Risk

     Ford  Credit's   asset  base  consists   primarily  of  fixed-rate   retail
installment sale and lease  contracts,  with an average life of about two years,
and floating rate inventory  financing  receivables.  Funding sources consist of
short-term  commercial  paper, term debt and receivable sales. To ensure funding
availability over a business cycle,  Ford Credit often borrows  longer-term debt
(five to ten  years).  Interest  rate  swaps  are used to  change  the  interest
characteristics  of the debt to match the interest rate  characteristics of Ford
Credit's assets. This matching locks in margins and reduces profit volatility. A
portion of assets are funded with equity, and volatility can occur as changes in
interest  rates impact the market value of equity.  This  volatility  is usually
small.

     The interest  rate  sensitivity  of Ford Credit's  assets and  liabilities,
including hedges, is evaluated each month. In addition,  the hedging strategy is
stress-tested  periodically  to  ensure  it  remains  effective  over a range of
potential changes in interest rates.

     Assuming  an  instantaneous  increase of one  percentage  point in interest
rates  applied to all  financial  assets,  debt and  hedging  instruments,  Ford
Credit's  after-tax  earnings  would  decline by $54  million  over the  ensuing
twelve-month period.

Currency Risk

     Ford Credit  generally  manages  assets and  liabilities  in local  country
currency, thus eliminating exposure to exchange rate movements. When a different
currency is used,  Ford Credit  typically  uses foreign  currency  agreements to
hedge specific debt instruments and intercompany  loans.  Ford Credit's earnings
in the  ensuing  twelve-month  period  would not be  materially  affected by the
change  in the  value  of Ford  Credit's  financial  assets,  debt  and  hedging
instruments resulting from an instantaneous 10% change in foreign currency rates
relative to the U.S. dollar.

Counterparty Risk

     Counterparty  risk  relates to the loss to Ford  Credit that could occur if
the  counterparty  to an interest  rate or foreign  currency  hedging or similar
contract  with Ford  Credit  defaults.  Ford and Ford Credit  jointly  establish
exposure limits for each counterparty to minimize risk and provide  counterparty
diversification.  Exposures to  counterparties,  including the mark-to-market on
derivatives, are monitored on a perodic basis.

Liquidity Risk
--------------

     Liquidity  risk is the  possibility of being unable to meet all present and
future  financial  obligations  as they come  due.  One of Ford  Credit's  major
objectives is to maintain funding  availability through any economic or business
cycle. Ford Credit focuses on developing  funding sources to support both growth
and  refinancing  maturing  debt.  Ford  Credit also issues debt that on average
matures later than assets liquidate, further enhancing overall liquidity.

     Ford Credit is one of the world's largest issuers of corporate debt. Global
funding activities include the direct sale of commercial paper, the placement of
term debt to retail and institutional investors and the sale of receivables.

     Management  closely  monitors the amount of  short-term  funding and mix of
short-term funding to total debt, the overall  composition of total debt and the
availability  of  committed  credit  facilities  in  relation  to the  level  of
outstanding  short-term debt. Stress testing of Ford Credit's liquidity position
is conducted periodically.

     Recent  efforts to provide  additional  sources of  liquidity  and  further
diversify  Ford  Credit's  funding base include the reduction in the reliance on
short-term debt and the development of more efficient term debt instruments.  In
1999,  Ford  Credit   implemented  the  first  Corporate   Global  Bond  Program
(GlobLSTM),

                                       50



Item 7A.  Quantitative and Qualitative Disclosures About Market Risk (Continued)

which  offers  large  liquid  transactions  with broad  investor  participation,
investor  loyalty,  and  enhanced  secondary  market  performance.  Other  major
initiatives  include a multi-issuer  Euro  medium-term  note program for certain
international  affiliates and the first corporate Internet bond offering.  Also,
the sale of receivables through  asset-backed  securitization  "ABS" program was
expanded to appeal to a global investor base -- the first global ABS transaction
was issued by Ford Credit in 2000.  The sale of  asset-backed  commercial  paper
also adds to Ford Credit's funding capacity.

     Ford Credit has,  and has the  ability to use  Ford's,  committed  lines of
credit from major banks, which provide additional levels of liquidity. (See Note
13 of Notes to Consolidated  Financial  Statements for a detailed  discussion of
these credit lines).  About 70% of these facilities have five-year terms.  These
facilities do not contain restrictive financial covenants (e.g.,  debt-to-equity
limitations)  or material  adverse change clauses that could preclude  borrowing
under these facilities.


FORD CREDIT CAPITAL ADEQUACY

     Underlying Ford Credit's risk and capital management strategies is the need
to effectively leverage capital in a way that:

     o    Protects  creditors  against  worst-case  unexpected losses consistent
          with Ford Credit's debt ratings.
     o    Provides  adequate returns by pricing products  commensurate  with the
          level of risk.

     Ford Credit's capital management  framework optimizes the use of capital by
sizing equity in proportion to risk.  Ford Credit manages its capital  structure
and makes adjustments as the level of portfolio risk changes. A capital adequacy
study that quantifies the sources of creditors' risk protection and stress tests
risks is performed semi-annually.

Sources of Creditor Risk Protection
-----------------------------------

     In evaluating  the sources of creditor risk  protection,  Ford Credit looks
beyond equity stated in its financial statements, and analyzes cash flows in the
event of  worst-case  unexpected  losses.  Net revenue from the  existing  asset
portfolio,  credit loss reserves,  residual loss reserves,  and net deferred tax
liabilities provide incremental creditor risk protection,  in addition to stated
equity on the balance sheet.  Ford Credit believes that the traditional  view of
capital adequacy,  expressed as debt-to-equity ratios, excludes other sources of
creditor risk protection, understating creditor risk protection.

     Ford Credit's objective is to provide customers with  competitively  priced
financing  products.  In  addition to taking into  consideration  borrowing  and
operating costs,  Ford Credit's pricing model includes factors related to credit
and residual risks, profits and related income taxes. To date, total net revenue
from the existing asset portfolio has been sufficient to cover both expected and
unexpected losses.  For example,  Ford Credit continued to be profitable even in
periods when it experienced  higher-than-normal  credit losses (late 1980's) and
residual losses (late 1990's).  Creditor risk  protection  associated with total
net revenue is evaluated using a conservative  estimate of lifetime expected net
income and related income taxes from the existing portfolio, after consideration
of defaults associated with stress testing.

     Additional sources of creditor risk protection,  in the form of reserves on
the balance  sheet,  include  credit loss reserves and residual  loss  reserves.
Credit and residual loss reserves are established to reflect partial  impairment
of  underlying  asset  values as recorded  on the balance  sheet due to expected
losses. Establishment of these reserves results in a charge to earnings (equity)
before actual losses occur.  Because these reserves are  established in addition
to credit and  residual  loss  expectation  factors  included in  pricing,  they
protect creditors if actual losses exceed initial loss expectations.

     Net  deferred  tax  liabilities  reflect  timing  differences  between  the
financial statement and tax treatment of revenues and expenses.  In the event of
unexpected  losses,  the net  deferred tax  liability  is reduced or  eliminated
without any actual tax payment,  thus providing an additional source of creditor
risk protection.

                                       51


Item 7A.  Quantitative and Qualitative Disclosures About Market Risk (Continued)


Quantifying Risk Through Stress Testing
---------------------------------------

     As part of Ford Credit's  capital  adequacy  study,  the asset portfolio is
stress tested semiannually to simulate lifetime worst-case unexpected losses and
define the level of capital  required.  The results of this study are integrated
into the pricing of Ford Credit's products by allocating a capital charge to all
products consistent with the underlying risks of each product.

     The  stress  test  study is  based  on  statistical  modeling  of  lifetime
worst-case unexpected losses for each asset class.  Worst-case unexpected losses
are calculated at a 99.9% confidence level,  consistent with bond default levels
for  single A rated  companies.  All risk  drivers in the  portfolio  are stress
tested,  including  the  likelihood  that all  segments  of the  portfolio  will
experience  worst-case losses at the same time. Following is a discussion of the
methodology used to stress test consumer credit risk and residual losses:

     o    Consumer  credit  loss  stress  testing  is  based  on the  historical
          experience of nearly fifteen million  liquidated  contracts  purchased
          since 1984. The historic  portfolio is stratified and the distribution
          and correlations of defaults for each group are analyzed.  Finally,  a
          simulation  model  is used to  replicate  potential  retail  portfolio
          behavior  in  worst-case  scenarios,  assuming  that  distribution  of
          defaults is statistically lognormal.

     o    Residual loss stress testing is based on the historical  experience of
          dispositions  since 1993 and  assumes  that all of the  vehicles  from
          non-defaulting  leases  will be  returned to Ford Credit at the end of
          the lease term. The historic portfolio is stratified and a statistical
          model is used to estimate the volatility of auction  values.  Finally,
          to compensate  for limited  historical  data, 30 years of used vehicle
          price volatility is incorporated.

Capital Adequacy Study Conclusions
----------------------------------
     To assess Ford Credit's  capital  adequacy,  stress-testing  results (total
lifetime  worst-case  unexpected  losses)  are  compared  against all sources of
creditor risk  protection.  At December 31, 2000,  Ford Credit believed that its
creditors had risk protection of more than 150% of modeled worst-case unexpected
losses for any  operational and other risks that may not have been quantified in
the study. Ford Credit updates the capital adequacy study semi-annually. Capital
will be  adjusted  as the  level of risk and  other  sources  of  creditor  risk
protection changes.

                                       52



Item 8.  Financial Statements and Supplementary Data
----------------------------------------------------

     Our  Financial  Statements,  the  accompanying  Notes  and  the  Report  of
Independent  Accountants  that are filed as part of this Report are listed under
Item 14. "Exhibits,  Financial Statement Schedules, and Reports on Form 8-K" and
are set forth on pages FS-1 through  FS-31  immediately  following the signature
pages of this Report.

     Selected quarterly financial data for us and our consolidated  subsidiaries
for  2000  and  1999  is in  Note  22 of our  Notes  to  Consolidated  Financial
Statements.



Item  9.  Changes  in and  Disagreements  With  Accountants  on  Accounting  and
--------------------------------------------------------------------------------
Financial Disclosure
--------------------

     Not required.





                                    PART III


Item 10.  Directors and Executive Officers of Ford
--------------------------------------------------

     The information required by Item 10 regarding our directors is incorporated
by reference from the information under the captions "Election of Directors" and
"Management Stock Ownership" in our Proxy Statement. The information required by
Item 10 regarding our executive officers appears as Item 4A under Part I of this
Report.

Item 11.  Executive Compensation
--------------------------------

     The  information  required by Item 11 is incorporated by reference from the
information under the following  captions in our Proxy Statement:  "Compensation
of  Directors",  "Compensation  Committee  Report  on  Executive  Compensation",
"Compensation of Executive Officers", "Stock Options", "Performance Stock Rights
and Restricted Stock Units", "Stock Performance Graphs" and "Retirement Plans".

Item 12.  Security Ownership of Certain Beneficial Owners and Management
------------------------------------------------------------------------

     The  information  required by Item 12 is incorporated by reference from the
information  under  the  caption  "Management  Stock  Ownership"  in  our  Proxy
Statement.

Item 13.  Certain Relationships and Related Transactions
--------------------------------------------------------

     The  information  required by Item 13 is incorporated by reference from the
information under the caption "Certain  Relationships and Related  Transactions"
in our Proxy Statement.

                                       53



                                     PART IV


Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K
--------------------------------------------------------------------------

(a)  1. Financial Statements - Ford Motor Company and Subsidiaries
------------------------------------------------------------------

     Consolidated  Statement  of Income for the years ended  December  31, 2000,
     1999, and 1998.

     Consolidated Balance Sheet at December 31, 2000 and 1999.

     Consolidated Statement of Cash Flows for the years ended December 31, 2000,
     1999, and 1998.

     Consolidated Statement of Stockholders' Equity for the years ended December
     31, 2000, 1999, and 1998.

     Notes to Consolidated Financial Statements

     Report of Independent Accountants

     The Consolidated Financial Statements,  the Notes to Consolidated Financial
Statements and the Report of Independent  Accountants  listed above are filed as
part of this Report and are set forth on pages FS-1  through  FS-31  immediately
following the signatures pages of this Report.

(a) 2.   Financial Statement Schedules
--------------------------------------

Designation                                 Description
-----------                                 -----------

Supplemental
 Schedule                           Financial Statements of Subsidiary

Report of Independent Accountants
on Supplemental Schedule

     The Financial Statement Schedule and the Report of Independent  Accountants
on  Supplemental  Schedule listed above are filed as part of this Report and are
set forth on pages FSS-1 through FSS-___  immediately  following page FS-31. The
schedules not filed are omitted because the information required to be contained
in them is  disclosed  elsewhere  in the  Financial  Statements  or the  amounts
involved are not sufficient to require submission.

                                       54


Item 14.  Exhibits,  Financial  Statement  Schedules,  and  Reports  on Form 8-K
(Continued)



(a) 3.   Exhibits
-----------------

Designation                        Description                                       Method of Filing
-----------                        -----------                                       ----------------
                                                                   
Exhibit 3-A          Restated Certificate of Incorporation,              Filed with this Report.
                     dated August 2, 2000.

Exhibit 3-B          By-Laws as amended                                  Filed as Exhibit 3-B to Ford's Quarterly
                     through July 14, 2000.                              Report on Form 10-Q for the quarter
                                                                         ended June 30, 2000.*

Exhibit 4            Form of Deposit Agreement dated as of               Filed as Exhibit 4-E to Ford's
                     October 29, 1992 among Ford,                        Registration Statement No. 33-53092.*
                     Chemical Bank, as Depositary,
                     and the holders from time to time of
                     Depositary Shares, each representing
                     1/2,000 of a share of Ford's
                     Series B Cumulative Preferred Stock.

Exhibit 10-A         Amended and Restated Profit                         Filed as Exhibit 10-A to the Registrant's
                     Maintenance Agreement, dated as of                  Annual Report on Form 10-K for the
                     January 1, 1999, between Ford                       year ended December 31, 1998.*
                     and Ford Credit.

Exhibit 10-B         Executive Separation Allowance Plan                 Filed with this Report.
                     as amended and restated through
                     December 18, 2000 for separations on
                     or after January 1, 1981.**

Exhibit 10-C         Description of Ford practices regarding             Filed as Exhibit 10-I to Ford's
                     club memberships for executives.**                  Annual Report on Form 10-K for the
                                                                         year ended December 31, 1981.*

Exhibit 10-D         Description of Ford practices regarding             Filed as Exhibit 10-J to Ford's
                     travel expenses of spouses of certain               Annual Report on Form 10-K for the
                     executives.**                                       year ended December 31, 1980.*

Exhibit 10-E         Deferred Compensation Plan for                      Filed as Exhibit 10-H-1 to Ford's
                     Non-Employee Directors, as amended                  Annual Report on Form 10-K for the
                     on July 11, 1991.**                                 year ended December 31, 1991.*

Exhibit 10-E-1       Amendments to Deferred Compensation Plan            Filed as Exhibit 10-G-1 to Ford's
                     for Non-Employee Directors, effective as of         Annual Report on Form 10-K for the
                     January 1, 1996.**                                  year ended December 31, 1995.*

Exhibit 10-E-2       Amendment to Deferred Compensation Plan             Filed as Exhibit 10-G-2 to Ford's
                     for Non-Employee Directors, effective as of         Annual Report on Form 10-K for the
                     November 14, 1996.**                                year ended December 31, 1996.*

Exhibit 10-F         Benefit Equalization Plan, as                       Filed with this Report.
                     amended and restated as of
                     December 18, 2000.**


                                       55


Item 14.  Exhibits,  Financial  Statement  Schedules,  and  Reports  on Form 8-K
(Continued)

Designation                        Description                                       Method of Filing
-----------                        -----------                                       ----------------

Exhibit 10-G         Description of financial counseling                 Filed as Exhibit 10-N to Ford's
                     services provided to certain executives.**          Annual Report on Form 10-K for the
                                                                         year ended December 31, 1983.*

Exhibit 10-H         Supplemental Executive Retirement Plan,             Filed with this Report.
                     as restated and incorporating amendments
                     through December 18, 2000.**

Exhibit 10-I         Restricted Stock Plan for Non-Employee              Filed as Exhibit 10-P to Ford's
                     Directors adopted by the Board of                   Annual Report on Form 10-K for the
                     Directors on November 10, 1988,                     year ended December 31, 1988.*
                     and approved by the stockholders at
                     the 1989 Annual Meeting.**

Exhibit 10-I-1       Amendment to Restricted Stock Plan for              Filed as Exhibit 10.1 to Ford's
                     Non-Employee Directors, effective as of             Quarterly Report on Form 10-Q for the
                     August 1, 1996.**                                   quarter ended September 30, 1996.*

Exhibit 10-J         1990 Long-Term Incentive Plan,                      Filed as Exhibit 10-R to Ford's
                     amended as of June 1, 1990.**                       Annual Report on Form 10-K for the
                                                                         year ended December 31, 1990.*

Exhibit 10-J-1       Amendment to 1990 Long-Term Incentive               Filed as Exhibit 10-P-1 to Ford's
                     Plan, effective as of October 1, 1990.**            Annual Report on Form 10-K for the
                                                                         year ended December 31, 1991.*

Exhibit 10-J-2       Amendment to 1990 Long-Term Incentive               Filed as Exhibit 10.2 to Ford's
                     Plan, effective as of March 8, 1995.**              Quarterly Report on Form 10-Q for the
                                                                         quarter ended March 31, 1995.*

Exhibit 10-J-3       Amendment to 1990 Long-Term                         Filed as Exhibit 10-M-3 to Ford's
                     Incentive Plan, effective as of                     Annual Report on Form 10-K for the
                     October 1, 1997.**                                  year ended December 31, 1997.*

Exhibit 10-J-4       Amendment to 1990 Long-Term                         Filed as Exhibit 10-M-4 to Ford's
                     Incentive Plan, effective as of                     Annual Report on Form 10-K for the
                     January 1, 1998.**                                  year ended December 31, 1997.*

Exhibit 10-K         Description of Matching Gift Program for            Filed as Exhibit 10-Q to Ford's
                     Non-Employee Directors.**                           Annual Report on Form 10-K for the
                                                                         year ended December 31, 1991.*

Exhibit 10-L         Non-Employee Directors Life Insurance               Filed as Exhibit 10-O to Ford's
                     and Optional Retirement Plan                        Annual Report on Form 10-K for the
                     (as amended as of January 1, 1993).**               year ended December 31, 1994.*

Exhibit 10-M         Description of Non-Employee Directors               Filed as Exhibit 10-S to Ford's
                     Accidental Death, Dismemberment and                 Annual Report on Form 10-K for the
                     Permanent Total Disablement Indemnity.**            year ended December 31, 1992.*

                                       56


Item 14.  Exhibits,  Financial  Statement  Schedules,  and  Reports  on Form 8-K
(Continued)


Designation                        Description                                       Method of Filing
-----------                        -----------                                       ----------------

Exhibit 10-N         Agreement dated December 10, 1992                   Filed as Exhibit 10-T to Ford's
                     between Ford and William C. Ford.**                 Annual Report on Form 10-K for the
                                                                         year ended December 31, 1992.*

Exhibit 10-O         Support Agreement dated as of October 1,            Filed as Exhibit 10-T to Ford's
                     1993 between Ford and FCE Bank.                     Annual Report on Form 10-K for the
                                                                         year ended December 31, 1993.*

Exhibit 10-O-1       Amendment No. 1 dated as of November                Filed as Exhibit 10-R-1 to Ford's
                     15, 1995 to Support Agreement between               Annual Report on Form 10-K for the
                     Ford and FCE Bank.                                  year ended December 31, 1995.*

Exhibit 10-P         Select Retirement Plan                              Filed with this Report.
                     as amended and restated through
                     January 1, 2000.**

Exhibit 10-Q         Deferred Compensation Plan,                         Filed as Exhibit 10-R to Ford's.
                     as amended and restated as of                       Annual Report on Form 10-K for the
                     January 1, 2000.**                                  year ended December 31, 1999.*

Exhibit 10-Q-1       Amendment to Deferred                               Filed as Exhibit 4.2 to Ford's
                     Compensation Plan effective                         Registration Statement No. 333-
                     as of April 12, 2000.**                             56660.*

Exhibit 10-Q-2       Amendment to Deferred                               Filed as Exhibit 4.3 to Ford's
                     Compensation Plan effective                         Registration Statement No. 333-
                     as of June 1, 2000.**                               56660.*

Exhibit 10-R         Annual Incentive Compensation Plan,                 Filed as Exhibit 10-T to Ford's
                     as amended and restated as of                       Annual Report on Form 10-K for the
                     January 1, 2000.**                                  year ended December 31, 1999.*

Exhibit 10-S         1998 Long-Term Incentive Plan,                      Filed as Exhibit 10-W to Ford's
                     effective as of January 1, 1998.**                  Annual Report on Form 10-K for the
                                                                         year ended December 31, 1997.*

Exhibit 10-S-1       Amendment to 1998 Long-Term Incentive               Filed as Exhibit 10-W-1 to Ford's
                     Plan, effective as of January 1, 1999.**            Annual Report on Form 10-K for
                                                                         the year ended December 31, 1998.*

Exhibit 10-S-2       Amendment to 1998 Long-Term Incentive               Filed as Exhibit 10-U-2 to Ford's
                     Plan, effective as of March 10, 2000.**             Annual Report on Form 10-K for the
                                                                         year ended December 31, 1999.*

Exhibit 10-T         Agreement dated January 13, 1999                    Filed as Exhibit 10-X to Ford's
                     between Ford and Edsel B. Ford II.**                Annual Report on Form 10-K for
                                                                         the year ended December 31, 1998.*

Exhibit 10-U         Description of March 2001 agreement                 Filed with this Report.
                     with Robert L. Rewey .**

Exhibit 10-V         Description of Agreement dated                      Filed with this Report.
                     March 18, 2001 with Wolfgang Reitzle.**

                                       57


Item 14.  Exhibits,  Financial  Statement  Schedules,  and  Reports  on Form 8-K
(Continued)


Designation                        Description                                       Method of Filing
-----------                        -----------                                       ----------------

Exhibit 12           Computation of Ratio of Earnings to                 Filed with this Report.
                     Combined Fixed Charges and Preferred
                     Stock Dividends.

Exhibit 21           List of Subsidiaries of Ford                        Filed with this Report.
                     as of March 15, 2001.

Exhibit 23           Consent of Independent Certified Public             Filed with this Report.
                     Accountants.

Exhibit 24           Powers of Attorney.                                 Filed with this Report.

---------------------------
*    Incorporated  by  reference  as an  exhibit  to this  Report  (file  number
     reference 1-3950, unless otherwise indicated)
**    Management contract or compensatory plan or arrangement

     Instruments  defining the rights of holders of certain  issues of long-term
debt of Ford and of certain consolidated  subsidiaries and of any unconsolidated
subsidiary,  for which  financial  statements are required to be filed with this
Report,  have not been filed as exhibits to this Report  because the  authorized
principal  amount of any one of such  issues  does not  exceed  10% of the total
assets of Ford and our  subsidiaries  on a  consolidated  basis.  Ford agrees to
furnish a copy of each of such instruments to the Commission upon request.

                                       58


Item 14.  Exhibits,  Financial  Statement  Schedules,  and  Reports  on Form 8-K
(Continued)


(b)  Reports on Form 8-K
------------------------

     Ford filed the  following  Current  Reports on Form 8-K during the  quarter
ended December 31, 2000:

     Current  Report on Form 8-K dated  October  3,  2000  included  information
relating to Ford's  September  2000 U.S. sales results and Ford's North American
production and overseas sales schedule.

     Current  Report on Form 8-K dated  October  18, 2000  included  information
relating to Ford's third quarter 200 financial results.

     Current  Report on Form 8-K dated  November  1, 2000  included  information
relating to Ford's North American production and overseas sales schedule.

     Current  Report on Form 8-K dated  November  1, 2000  included  information
relating to Ford's October 2000 U.S. sales results.

     Current  Report on Form 8-K dated  December  1, 2000  included  information
relating to Ford's  November 2000 U.S.  sales results and Ford's North  American
production and overseas sales schedules.

     Current  Report on Form 8-K dated  December 21, 2000  included  information
relating to Ford's  vehicle  production in the fourth  quarter of 2000 and first
quarter of 2001.

                                       59


                                   SIGNATURES


     Pursuant to the  requirements of Section 13 of the Securities  Exchange Act
of 1934,  Ford has duly  caused  this  Report to be signed on its  behalf by the
undersigned, thereunto duly authorized.

FORD MOTOR COMPANY


By:         Henry D. G. Wallace*
         -------------------------
           (Henry D. G. Wallace)
         Group Vice President and
         Chief Financial Officer


Date:    March 21, 2001

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report has been signed below by the  following  persons on behalf of Ford and in
the capacities on the date indicated.



         Signature                                         Title                                Date
         ---------                                         -----                                ----
                                                                                    


William Clay Ford, Jr.*                         Director, Chairman of the
-----------------------------                   Board and Chairman of the
(William Clay Ford, Jr.)                        Environmental and Public
                                                Policy Committee, the Finance
                                                Committee and the Nominating
                                                and Governance Committee

Jacques Nasser*                                 Director and President
-----------------------------                   and Chief Executive Officer
(Jacques Nasser)                                (principal executive officer)


John R. H. Bond*                                Director
-----------------------------
(John R. H. Bond)


Michael D. Dingman*                             Director and                              March 21, 2001
-----------------------------                   Chairman of the
(Michael D. Dingman)                            Compensation
                                                Committee

Edsel B. Ford II*                               Director
-----------------------------
(Edsel B. Ford II)


William Clay Ford*                              Director
-----------------------------
(William Clay Ford)


Irvine O. Hockaday, Jr.*                        Director and
-----------------------------                   Chairman of the
(Irvine O. Hockaday, Jr.)                       Audit Committee


                                       60



         Signature                                         Title                                Date
         ---------                                         -----                                ----

Marie-Josee Kravis*                             Director
-----------------------------
(Marie-Josee Kravis)


Ellen R. Marram*                                Director
-----------------------------
(Ellen R. Marram)


Homer A Neal*                                   Director
-----------------------------
(Homer A. Neal)


Jorma Ollila*                                   Director
-----------------------------
(Jorma Ollila)


Carl E. Reichardt*                              Director                                  March 21, 2001
-----------------------------
(Carl E. Reichardt)


Robert E. Rubin*                                Director
-----------------------------
(Robert E. Rubin)


John L. Thornton*                               Director
-----------------------------
(John L. Thornton)


Henry D. G. Wallace*                            Group Vice President and
-----------------------------                   Chief Financial Officer
(Henry D. G. Wallace)                           (principal financial officer)


Lloyd E. Hansen*                                Vice President and
-----------------------------                   Controller
(Lloyd E. Hansen)                               (principal accounting officer)



*By: /s/ Peter Sherry, Jr.
     ---------------------
     (Peter Sherry, Jr.)
       Attorney-in-Fact

                                       61




                                         Ford Motor Company and Subsidiaries

                                                     HIGHLIGHTS
                                                     ----------

                                                                  Fourth Quarter                          Full Year
                                                            ----------------------------          ---------------------------
                                                               2000            1999                  2000           1999
                                                            ------------    ------------          ------------   ------------
                                                                                                     
Worldwide vehicle unit sales of
 cars and trucks (in thousands)
- North America                                                 1,209           1,280                 4,933          4,787
- Outside North America                                           631             639                 2,491          2,433
                                                                -----           -----                 -----          -----
    Total                                                       1,840           1,919                 7,424          7,220
                                                                =====           =====                 =====          =====
Sales and revenues (in millions)
- Automotive                                                $  35,107       $  37,285             $ 141,230      $ 135,073
- Financial Services                                            7,480           6,637                28,834         25,585
                                                            ---------       ---------             ---------      ---------
    Total                                                   $  42,587       $  43,922             $ 170,064      $ 160,658
                                                            =========       =========             =========      =========
Net income (in millions)
- Automotive                                                $     629       $   1,354             $   3,624      $   4,986
- Financial Services                                              448             357                 1,786          1,516
                                                            ---------       ---------             ---------      ---------
    Income from continuing operations                           1,077           1,711                 5,410          6,502
- Discontinued operation (Visteon)                                  -              95                   309            735
- Loss on spin-off of Visteon                                       -               -                (2,252)             -
                                                            ---------       ---------             ---------      ---------
    Total                                                   $   1,077       $   1,806             $   3,467      $   7,237
                                                            =========       =========             =========      =========

Capital expenditures (in millions)
- Automotive                                                $   2,510       $   2,548             $   7,393      $   7,069
- Financial Services                                              390             155                   955            590
                                                            ---------       ---------             ---------      ---------
    Total                                                   $   2,900       $   2,703             $   8,348      $   7,659
                                                            =========       =========             =========      =========
Automotive capital expenditures as a
 percentage of sales                                              7.1%            6.8%                  5.2%           5.2%

Stockholders' equity at December 31
- Total (in millions)                                       $  18,610       $  27,604             $  18,610      $  27,604
- Annualized after-tax return on Common
   and Class B stockholders' equity                              25.5%           26.6%                 14.9%          28.2%

Automotive net cash at December 31
 (in millions)
- Cash and marketable securities                            $  16,490       $  21,736             $  16,490      $  21,736
- Debt                                                         12,046          11,736                12,046         11,736
                                                            ---------       ---------             ---------      ---------
   Automotive net cash                                      $   4,444       $  10,000             $   4,444      $  10,000
                                                            =========       =========             =========      =========

After-tax return on sales
- North American Automotive                                       2.4%            5.5%                  4.8%           5.5%
- Total Automotive                                                1.8%            3.7%                  2.6%           3.7%

Shares of Common and Class B Stock
 (in millions)
- Average number outstanding                                    1,873           1,207                 1,483          1,210
- Number outstanding at December 31                             1,854           1,207                 1,854          1,207

Common Stock price (per share)
(adjusted to reflect Visteon spin-off
 and Value Enhancement Plan)
- High                                                      $  27           $  30-1/8             $  31-1/2      $  37-1/4
- Low                                                          21-5/8          26-5/8                21-5/8         25-3/8

AMOUNTS PER SHARE OF COMMON AND CLASS B
 STOCK AFTER PREFERRED STOCK DIVIDENDS

Income assuming dilution
- Automotive                                                $    0.33       $    1.10             $    2.40      $    4.03
- Financial Services                                             0.24            0.29                  1.19           1.23
                                                            ---------       ---------             ---------      ---------
    Subtotal                                                     0.57            1.39                  3.59           5.26
- Discontinued operation (Visteon)                                  -            0.08                  0.21           0.60
- Loss on spin-off of Visteon                                       -               -                 (1.50)             -
                                                            ---------       ---------             ---------      ---------
    Total                                                   $    0.57       $    1.47             $    2.30      $    5.86
                                                            =========       =========             =========      =========

Cash dividends                                              $    0.30       $    0.50             $    1.80      $    1.88



                                      FS-1






                                         Ford Motor Company and Subsidiaries
                                                 VEHICLE UNIT SALES
                                                 ------------------
                                  For the Periods Ended December 31, 2000 and 1999
                                                   (in thousands)



                                                      Fourth Quarter                            Full Year
                                                  ------------------------              --------------------------
                                                    2000            1999                  2000              1999
                                                  --------        --------              --------          --------

                                                                                              
North America
United States
 Cars                                               433             497                 1,775             1,725
 Trucks                                             643             646                 2,711             2,660
                                                  -----           -----                 -----             -----
  Total United States                             1,076           1,143                 4,486             4,385

Canada                                               83             100                   300               288
Mexico                                               50              37                   147               114
                                                  -----           -----                 -----             -----

  Total North America                             1,209           1,280                 4,933             4,787

Europe
Britain                                             108             122                   476               518
Germany                                              79              80                   320               353
Italy                                                65              59                   222               209
Spain                                                51              45                   180               180
France                                               39              44                   158               172
Sweden                                               42              40                   132                94
Other countries                                     122             135                   474               434
                                                  -----           -----                 -----             -----

  Total Europe                                      506             525                 1,962             1,960

Other international
Brazil                                               37              26                   134               117
Australia                                            30              30                   125               125
Taiwan                                                9              11                    63                56
Argentina                                            10              16                    49                60
South Africa                                          8               4                    30                18
Other countries                                      31              27                   128                97
                                                  -----           -----                 -----             -----

  Total other international                         125             114                   529               473
                                                  -----           -----                 -----             -----

Total worldwide vehicle unit sales                1,840           1,919                 7,424             7,220
                                                  =====           =====                 =====             =====



Vehicle unit sales generally are reported  worldwide on a "where sold" basis and
include sales of all Ford Motor Company units, as well as units  manufactured by
Ford and sold to other manufacturers.

Prior periods were restated to correct reported unit sales.

                                      FS-2







                                         Ford Motor Company and Subsidiaries
                                          CONSOLIDATED STATEMENT OF INCOME
                                          --------------------------------
                                For the Years Ended December 31, 2000, 1999 and 1998
                                       (in millions, except amounts per share)

                                                                              2000           1999           1998
                                                                           ------------   ------------   ------------
                                                                                                
AUTOMOTIVE
Sales (Note 1)                                                             $141,230       $135,073       $118,017

Costs and expenses (Notes 1 and 19)
Costs of sales                                                              126,120        118,985        104,616
Selling, administrative and other expenses                                    9,884          8,874          7,834
                                                                           --------       --------       --------
  Total costs and expenses                                                  136,004        127,859        112,450

Operating income                                                              5,226          7,214          5,567

Interest income                                                               1,488          1,418          1,325
Interest expense                                                              1,383          1,347            795
                                                                           --------       --------       --------
  Net interest income                                                           105             71            530
Equity in net income/(loss) of affiliated companies (Note 1)                    (70)            35            (64)
Net income/(expense) from transactions with
 Financial Services (Note 1)                                                      6            (45)          (191)
                                                                           --------       --------       --------

Income before income taxes - Automotive                                       5,267          7,275          5,842

FINANCIAL SERVICES
Revenues (Note 1)                                                            28,834         25,585         25,333

Costs and expenses (Note 1)
Interest expense                                                              9,519          7,679          8,036
Depreciation                                                                  9,408          9,254          8,589
Operating and other expenses                                                  4,971          4,653          4,618
Provision for credit and insurance losses                                     1,963          1,465          1,798
                                                                           --------       --------       --------
  Total costs and expenses                                                   25,861         23,051         23,041
Net income/(expense)from transactions with Automotive (Note 1)                   (6)            45            191
Gain on spin-off of The Associates (Note 19)                                      -              -         15,955
                                                                           --------       --------       --------

Income before income taxes - Financial Services                               2,967          2,579         18,438
                                                                           --------       --------       --------

TOTAL COMPANY
Income before income taxes                                                    8,234          9,854         24,280
Provision for income taxes (Note 10)                                          2,705          3,248          2,760
                                                                           --------       --------       --------
Income before minority interests                                              5,529          6,606         21,520
Minority interests in net income of subsidiaries                                119            104            152
                                                                           --------       --------       --------
Income from continuing operations                                             5,410          6,502         21,368
Income from discontinued operation (Note 2)                                     309            735            703
Loss on spin-off of discontinued operation (Note 2)                          (2,252)             -              -
                                                                           --------       --------       --------
Net income                                                                 $  3,467       $  7,237       $ 22,071
                                                                           ========       ========       ========
Income attributable to Common and Class B Stock
 after Preferred Stock dividends (Note 1)                                  $  3,452       $  7,222       $ 21,964

Average number of shares of Common and Class B
 Stock outstanding (Note 1)                                                   1,483          1,210          1,211

AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK (Note 1)
Basic income
     Income from continuing operations                                     $   3.66       $   5.38       $  17.59
     Net income                                                                2.34           5.99          18.17
Diluted income
     Income from continuing operations                                     $   3.59       $   5.26       $  17.19
     Net income                                                                2.30           5.86          17.76

Cash dividends                                                             $   1.80       $   1.88       $   1.72



The accompanying notes are part of the financial statements.

                                      FS-3






                                         Ford Motor Company and Subsidiaries
                                             CONSOLIDATED BALANCE SHEET
                                             --------------------------
                                          As of December 31, 2000 and 1999
                                                    (in millions)
                                                                                                2000              1999
                                                                                           ---------------   ----------------
                                                                                                        
ASSETS
Automotive
Cash and cash equivalents                                                                   $  3,374          $  2,793
Marketable securities (Note 4)                                                                13,116            18,943
                                                                                            --------          --------
   Total cash and marketable securities                                                       16,490            21,736

Receivables                                                                                    4,685             5,267
Inventories (Note 8)                                                                           7,514             5,684
Deferred income taxes                                                                          2,239             3,762
Other current assets (Note 1)                                                                  5,318             3,831
Current receivable from Financial Services (Note 1)                                            1,587             2,304
                                                                                            --------          --------
   Total current assets                                                                       37,833            42,584

Equity in net assets of affiliated companies (Note 1)                                          2,949             2,539
Net property (Note 9)                                                                         37,508            36,528
Deferred income taxes                                                                          3,342             2,454
Net assets of discontinued operation (Note 2)                                                      -             1,566
Other assets (Note 1)                                                                         13,711            13,530
                                                                                            --------          --------
   Total Automotive assets                                                                    95,343            99,201

Financial Services
Cash and cash equivalents                                                                      1,477             1,588
Investments in securities (Note 4)                                                               817               733
Finance receivables (Notes 5 and 7)                                                          125,164           113,298
Net investment in operating leases (Notes 6 and 7)                                            46,593            42,471
Other assets                                                                                  12,390            11,123
Receivable from Automotive (Note 1)                                                            2,637             1,835
                                                                                            --------          --------
   Total Financial Services assets                                                           189,078           171,048
                                                                                            --------          --------

   Total assets                                                                             $284,421          $270,249
                                                                                            ========          ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Automotive
Trade payables                                                                              $ 15,075          $ 14,292
Other payables                                                                                 4,011             3,778
Accrued liabilities (Note 11)                                                                 23,515            18,488
Income taxes payable                                                                             449             1,709
Debt payable within one year (Note 13)                                                           277             1,338
                                                                                            --------          --------
   Total current liabilities                                                                  43,327            39,605

Long-term debt (Note 13)                                                                      11,769            10,398
Other liabilities (Note 11)                                                                   30,495            29,283
Deferred income taxes                                                                            353             1,223
Payable to Financial Services (Note 1)                                                         2,637             1,835
                                                                                            --------          --------
   Total Automotive liabilities                                                               88,581            82,344

Financial Services
Payables                                                                                       5,297             3,550
Debt (Note 13)                                                                               153,510           139,919
Deferred income taxes                                                                          8,677             7,078
Other liabilities and deferred income                                                          7,486             6,775
Payable to Automotive (Note 1)                                                                 1,587             2,304
                                                                                            --------          --------
   Total Financial Services liabilities                                                      176,557           159,626

Company-obligated mandatorily redeemable preferred securities of a subsidiary
 trust holding solely junior subordinated debentures of the Company (Note 1)                     673               675

Stockholders' equity
Capital stock (Notes 14 and 15)
 Preferred Stock, par value $1.00 per share (aggregate liquidation preference
  of $177 million)                                                                                 *                 *
 Common Stock (par value $0.01 and $1.00 per share as of 2000 and 1999,                           18             1,151
  respectively; 1,837 and 1,151 million shares issued as of 2000 and 1999,
  respectively) (Note 3)
 Class B Stock, par value $0.01 and $1.00 per share as of 2000 and                                 1                71
  1999, respectively (71 million shares issued) (Note 3)
Capital in excess of par value of stock                                                        6,174             5,049
Accumulated other comprehensive loss                                                          (3,432)           (1,856)
ESOP loan and treasury stock                                                                  (2,035)           (1,417)
Earnings retained for use in business                                                         17,884            24,606
                                                                                            --------          --------
   Total stockholders' equity                                                                 18,610            27,604
                                                                                            --------          --------

   Total liabilities and stockholders' equity                                               $284,421          $270,249
                                                                                            ========          ========
- - - -


*Less than $1 million
The accompanying notes are part of the financial statements.

                                      FS-4





                                         Ford Motor Company and Subsidiaries
                                        CONSOLIDATED STATEMENT OF CASH FLOWS
                                For the Years Ended December 31, 2000, 1999 and 1998
                                                    (in millions)

                                                         2000                          1999                          1998
                                              ---------------------------- ----------------------------- ---------------------------
                                                              Financial                     Financial                     Financial
                                               Automotive      Services      Automotive      Services      Automotive      Services
                                              -------------- ------------- --------------- ------------- --------------- -----------

                                                                                                        
Cash and cash equivalents at January 1         $  2,793       $  1,588      $  3,143        $  1,151       $ 5,972        $  1,618

Cash flows from operating activities
 (Note 20)                                       18,307         15,457        14,851          12,540         8,249          13,478

Cash flows from investing activities
 Capital expenditures                            (7,393)          (955)       (7,069)           (590)       (7,252)           (504)
 Purchase of leased assets                            -              -             -               -          (110)              -
 Acquisitions of other companies
  (Note 19)                                      (2,662)          (112)       (5,763)           (144)            -            (344)
 Acquisitions of receivables and lease
  investments                                         -        (96,512)            -         (80,422)            -         (78,863)
 Collections of receivables and lease
  investments                                         -         54,290             -          46,646             -          49,303
 Net acquisitions of daily rental vehicles            -         (2,107)            -          (1,739)            -          (1,790)
 Purchases of securities                         (5,395)          (564)       (3,609)           (900)         (758)         (2,102)
 Sales and maturities of securities               4,938            557         2,352           1,100           590           2,271

 Proceeds from sales of receivables and
  lease investments                                   -         19,439             -           9,931             -           8,413
 Net investing activity with
  Financial Services                                645              -         1,329               -           642               -
 Other                                                -           (320)          (70)            119          (389)           (463)
                                               --------       --------      --------        --------      --------        --------
   Net cash used in investing activities         (9,867)       (26,284)      (12,830)        (25,999)       (7,277)        (24,079)

Cash flows from financing activities
 Cash dividends                                  (2,751)             -        (2,290)              -        (5,348)              -
 Issuance of Common Stock                           592              -           274               -           154               -
 Purchase of Ford treasury stock                 (1,821)             -          (707)              -          (669)              -
 Preferred Stock - Series B repurchase,
  Series A redemption                                 -              -             -               -          (420)              -
 Changes in short-term debt                        (776)        (6,406)         (429)          5,547           463           7,475
 Proceeds from issuance of other debt             2,363         37,086         3,143          37,184         2,307          21,776
 Principal payments on other debt                (1,277)       (17,158)         (821)        (28,672)       (1,285)        (16,797)
 Value Enhancement Plan payments (Note 3)        (5,555)             -             -               -             -               -
 Net debt repayments from discontinued
  operation                                         650              -             -               -             -               -
 Net cash distribution to
  discontinued operation                            (85)             -             -               -             -               -
 Net financing activity with Automotive               -           (645)            -          (1,329)            -            (642)
 Spin-off of The Associates cash                      -              -             -               -             -            (508)
 Other                                              139           (585)         (127)             88          (257)            (12)
                                               --------       --------      --------        --------      --------        --------
   Net cash (used in)/provided by
    financing activities                         (8,521)        12,292          (957)         12,818        (5,055)         11,292

Effect of exchange rate changes on cash             (55)          (859)          (57)           (279)          (50)            146
Net transactions with Automotive/
 Financial Services                                 717           (717)       (1,357)          1,357         1,304          (1,304)
                                               --------       --------      --------        --------      --------        --------

   Net increase/(decrease) in cash and
    cash equivalents                                581           (111)         (350)            437        (2,829)           (467)
                                               --------       --------      --------        --------       -------

Cash and cash equivalents at December 31       $  3,374       $  1,477      $  2,793        $  1,588       $ 3,143        $  1,151
                                               ========       ========      ========        ========       =======



The accompanying notes are part of the financial statements.

                                      FS-5







                                         Ford Motor Company and Subsidiaries
                                   CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                   ----------------------------------------------
                                For the Years Ended December 31, 1998, 1999 and 2000
                                                    (in millions)


                                                  Capital                      Other Comprehensive Income
                                                 in Excess              ----------------------------------------
                                                   of Par                  Foreign       Minimum    Unrealized
                                       Capital    Value of    Retained     Currency      Pension      Holding
                                        Stock       Stock     Earnings   Translation    Liability    Gain/Loss    Other     Total
                                      ---------- ------------ --------- -------------- ----------- ------------- -------  ---------
                                                                                           
YEAR ENDED DECEMBER 31, 1998
----------------------------
Balance at beginning of year          $1,203       $5,564     $25,234     $   (911)      $ (337)       $ 73     $   (39)   $30,787

Comprehensive income
 Net income (excluding gain on
   spin-off of The Associates)                                  6,116                                                        6,116
 Gain on The Associates spin-off                               15,955                                                       15,955
 Foreign currency translation                                                 (81)                                            (81)
 Minimum pension liability
   (net of tax benefit of $184)                                                            (361)                              (361)
 Net holding loss
   (net of tax benefit of $3)                                                                           (28)                   (28)
                                                                                                                           -------
  Comprehensive income                                                                                                      21,601
Common Stock issued for Series A
  Preferred Stock conversion,
  employee benefit plans and other        19          139                                                                      158
Preferred Stock-Series B repurchase
 and Series A redemption                             (420)                                                                    (420)
ESOP loan and treasury stock                                                                                     (1,046)    (1,046)
The Associates spin-off to Ford
 Common stockholders                                          (22,298)                                                     (22,298)
Cash dividends                                                 (5,348)                                                      (5,348)
                                      ------       ------     -------     --------       ------        ----     -------    -------
Balance at end of year                $1,222       $5,283     $19,659     $   (992)      $ (698)       $ 45     $(1,085)   $23,434
                                      ======       ======     =======     ========       ======        ====     =======    =======

YEAR ENDED DECEMBER 31, 1999
----------------------------
Balance at beginning of year          $1,222       $5,283     $19,659     $   (992)      $ (698)       $ 45     $(1,085)   $23,434

Comprehensive income
 Net income                                                     7,237                                                        7,237
 Foreign currency translation                                                 (573)                                           (573)
 Minimum pension liability
   (net of tax of $174)                                                                     324                                324
 Net holding gain
   (net of tax of $20)                                                                                   38                     38
                                                                                                                           -------
  Comprehensive income                                                                                                       7,026
Common Stock issued for
 employee benefit plans and other                    (234)                                                                    (234)
ESOP loan and treasury stock                                                                                       (332)      (332)
Cash dividends                                                 (2,290)                                                      (2,290)
                                      ------       ------     -------     --------       ------        ----     -------    -------
Balance at end of year                $1,222       $5,049     $24,606     $ (1,565)      $ (374)       $ 83     $(1,417)   $27,604
                                      ======       ======     =======     ========       ======        ====     =======    =======

YEAR ENDED DECEMBER 31, 2000
----------------------------
Balance at beginning of year          $1,222       $5,049     $24,606     $ (1,565)      $ (374)       $ 83     $(1,417)   $27,604

Comprehensive income
 Net income                                                     3,467                                                        3,467
 Foreign currency translation                                               (1,538)                                         (1,538)
 Minimum pension liability
   (net of tax benefit of $36)                                                              (66)                               (66)
 Net holding gain
   (net of tax of $15)                                                                                   28                     28
                                                                                                                           -------
  Comprehensive income                                                                                                       1,891
Common Stock issued for
 employee benefit plans and other                     (78)                                                                     (78)
ESOP loan and treasury stock                                                                                       (618)      (618)
Value Enhancement Plan                 (1,203)      1,203      (5,731)                                                      (5,731)
Stock dividend (Spin-off of Visteon)                           (1,707)                                                      (1,707)
Cash dividends                                                 (2,751)                                                      (2,751)
                                      -------      ------     -------     --------       ------        ----     -------    -------
Balance at end of year                $    19      $6,174     $17,884     $ (3,103)      $ (440)       $111     $(2,035)   $18,610
                                      =======      ======     =======     ========       ======        ====     =======    =======



The accompanying notes are part of the financial statements.

                                      FS-6



                       Ford Motor Company and Subsidiaries
                   Notes to Consolidated Financial Statements
                   ------------------------------------------

NOTE 1.  Accounting Policies
----------------------------

Principles of Consolidation
---------------------------

The consolidated  financial  statements include all majority-owned  subsidiaries
and reflect the operating  results,  assets,  liabilities and cash flows for the
Company's two business sectors:  Automotive and Financial  Services.  The assets
and  liabilities  of  the  Automotive   sector  are  classified  as  current  or
noncurrent,  and  those  of the  Financial  Services  sector  are  unclassified.
Affiliates that are 20% to 50%  owned,  principally  Mazda Motor Corporation and
AutoAlliance  International  Inc., and subsidiaries where control is expected to
be temporary,  principally investments in certain dealerships, are accounted for
on an equity basis. Use of estimates and assumptions as determined by management
is  required  in  the  preparation  of  consolidated   financial  statements  in
conformity with generally accepted accounting  principles.  Actual results could
differ from those  estimates  and  assumptions.  For  purposes of these Notes to
Consolidated  Financial  Statements,  "Ford" or "the  Company"  means Ford Motor
Company  and its  majority-owned  consolidated  subsidiaries  unless the context
requires  otherwise.  Certain  amounts for prior  periods are  reclassified,  if
required, to conform to present period presentations.

Structure of Operations
-----------------------

The Company's sectors,  Automotive and Financial Services,  are managed as three
primary  operating  segments.  A segment is defined as a component with business
activity   resulting  in  revenue  and  expense  that  has  separate   financial
information  evaluated regularly by the Company's chief operating decision maker
in  determining  resource  allocation and assessing  performance  (Note 21). The
Automotive sector (and segment) consists of the design,  manufacture,  sale, and
service of cars and trucks. The Financial Services sector primarily includes two
segments, Ford Motor Credit Company and its subsidiaries ("Ford Credit") and The
Hertz Corporation and its subsidiaries ("Hertz").  The Financial Services sector
also includes less significant financial services businesses. Ford Credit leases
and finances  the purchase of cars and trucks made by Ford and other  companies.
It also  provides  inventory  and  capital  financing  to  retail  car and truck
dealerships.  Hertz  rents  cars and  trucks  and  industrial  and  construction
equipment.  Both Ford Credit and Hertz also have insurance operations related to
their businesses.

Intersector  transactions  represent principally  transactions  occurring in the
ordinary  course  of  business,  borrowings  and  related  transactions  between
entities in the  Financial  Services and  Automotive  sectors,  and interest and
other support under special vehicle financing  programs.  These arrangements are
reflected in the respective business sectors.

Revenue Recognition - Automotive Sector
---------------------------------------

Sales are generally recorded by the Company when products are shipped to dealers
and  other  customers  and title is  transferred,  except  as  described  below.
Estimated costs for approved sales incentive programs normally are recognized as
sales  reductions at the latter of a) the time of revenue  recognition or b) the
date the incentive program is approved.

Sales through  dealers to certain daily rental  companies where the daily rental
company has an option to require Ford to repurchase  vehicles subject to certain
conditions  are  recognized  over the period of daily rental service in a manner
similar to lease accounting.  The carrying value of these vehicles,  included in
other current assets, was $2.0 billion at both December 31, 2000 and 1999.

                                      FS-7




NOTE 1.  Accounting Policies (continued)
----------------------------

Revenue Recognition - Financial Services Sector
-----------------------------------------------

Revenue from finance  receivables is recognized  over the term of the receivable
using the  interest  method.  Certain  loan  origination  costs are deferred and
amortized, using the interest method, over the term of the related receivable as
a reduction in financing revenue. Revenue from operating leases is recognized on
a straight-line  basis over the term of the lease.  Initial direct costs, net of
acquisition fees related to leases,  are deferred and amortized over the term of
the lease. Agreements between Automotive sector operations and certain Financial
Services sector  operations  provide for interest and residual value supplements
and other support costs to be paid by  Automotive  sector  operations on certain
financing and leasing  transactions.  The Financial  Services sector  recognizes
this revenue in income over the period that the related  receivables  and leases
are outstanding;  the estimated costs of interest and residual value supplements
and other  support costs are recorded as sales  incentives by Automotive  sector
operations in the same manner as sales incentives described above.

The  accrual  of  interest  on  loans  is  discontinued  at the  time a loan  is
determined  to  be  impaired.  Subsequent  amounts  of  interest  collected  are
recognized  in  income  only if full  recovery  of the  remaining  principal  is
probable.  Other amounts collected are generally recognized first as a reduction
of principal. Any remaining amounts are treated as a recovery.

The Financial  Services sector  periodically sells finance  receivables  through
special  purpose  subsidiaries,  retains the servicing  rights and certain other
beneficial  interests,  and  receives a  servicing  fee which is  recognized  as
collected  over the  remaining  term of the related  sold  finance  receivables.
Estimated gains or losses from the sale of finance receivables are recognized in
the period in which the sale  occurs.  In  determining  the gain or loss on each
qualifying  sale of finance  receivables,  the investment in the sold receivable
pool is  allocated  between the portion sold and the portion  retained  based on
their relative fair values at the date of sale.

Other Costs
-----------

Advertising  and sales promotion costs are expensed as incurred and are included
in  selling,   administrative,   and  other  expenses.  Advertising  costs  were
$3.0 billion in 2000, $2.7 billion in 1999 and $2.1 billion in 1998.

Estimated costs related to product  warranty are accrued at the time of sale and
are included in cost of sales.

Engineering,  research and development  costs are included in cost of sales, are
expensed as incurred,  and were $6.8 billion in 2000,  $6.0 billion in 1999, and
$5.3 billion in 1998.

Income Per Share of Common and Class B Stock
--------------------------------------------

Basic income per share of Common and Class B Stock is calculated by dividing the
income  attributable to Common and Class B Stock by the average number of shares
of Common and Class B Stock outstanding during the applicable  period,  adjusted
for shares issuable under employee savings and compensation plans.

The  calculation  of diluted  income per share of Common and Class B Stock takes
into account the effect of obligations,  such as stock options, considered to be
potentially dilutive.

                                      FS-8



NOTE 1.  Accounting Policies (continued)
----------------------------

Income per share of Common and Class B Stock was as follows (in millions):




                                                                        2000                1999                1998
                                                                  ------------------ ------------------- -------------------
                                                                   Income  Shares*    Income   Shares*    Income   Shares*
                                                                  ------------------ ------------------- -------------------
                                                                                                  
Income from continuing operations and shares                       $5,410   1,483     $6,502    1,210    $21,368    1,211
Preferred Stock dividend requirements                                 (15)      -        (15)       -        (22)       -
Premium on Series B Tender Offer**                                      -       -          -        -        (85)       -
Issuable and uncommitted ESOP shares                                    -      (9)         -       (4)         -       (2)
                                                                   ------   -----     ------    -----    -------    -----
  Basic continuing income and shares                               $5,395   1,474     $6,487    1,206    $21,261    1,209

Basic income per share from continuing operations                  $ 3.66             $ 5.38             $ 17.59
Basic income per share from discontinued operation                   0.21               0.61                0.58
Basic loss per share on spin-off of discontinued operation          (1.53)                 -                   -
                                                                   ------             ------             -------
  Basic income per share                                           $ 2.34             $ 5.99             $ 18.17

Basic continuing income and shares                                 $5,395   1,474     $6,487    1,206    $21,261    1,209
Net dilutive effect of options                                          -      30          -       27          -       28
Convertible Preferred Stock and other                                   -       -         (1)       -         (1)       -
                                                                   ------   -----     ------    -----    -------    -----
  Diluted continuing income and shares                             $5,395   1,504     $6,486    1,233    $21,260    1,237

Diluted income per share from continuing operations                $ 3.59             $ 5.26             $ 17.19
Diluted income per share from discontinued operation                 0.21               0.60                0.57
Diluted loss per share on spin-off of discontinued operation        (1.50)                 -                   -
                                                                   ------             ------             -------
  Diluted income per share                                         $ 2.30             $ 5.86             $ 17.76


- - - - -
 *Average shares outstanding (Note 3)
**Represents a one-time reduction of $0.07 per share of Common and Class B Stock
  resulting from the premium paid to repurchase the Company's Series B
  Cumulative Preferred Stock.

Derivative Financial Instruments
--------------------------------

Ford has operations in over 30 countries and sells vehicles in over 200 markets,
and is exposed to a variety of market risks, including the effects of changes in
foreign currency  exchange rates,  interest rates, and commodity  prices.  These
financial exposures are monitored and managed by the Company as an integral part
of  the  Company's  overall  risk  management  program,   which  recognizes  the
unpredictability  of  financial  markets  and  seeks to reduce  the  potentially
adverse effect on the Company's results.  The Company uses derivative  financial
instruments to manage the exposures to fluctuations in exchange rates,  interest
rates, and commodity prices. All derivative financial instruments are classified
as "held for purposes other than trading"; company policy specifically prohibits
the use of  leveraged  derivatives  or use of any  derivatives  for  speculative
purposes.

Ford's primary foreign currency  exposures,  in terms of net corporate exposure,
are in the Swedish krona,  euro,  British pound sterling,  Japanese yen, Mexican
peso,  and Brazilian  real.  Agreements  to manage  foreign  currency  exposures
include forward contracts, swaps, and options. The Company uses these derivative
instruments to hedge assets and liabilities  denominated in foreign  currencies,
firm commitments,  and certain  investments in foreign  subsidiaries.  Gains and
losses  on hedges of firm  commitments  are  deferred  and  recognized  with the
related  transactions.  In the case of  hedges  of net  investments  in  foreign
subsidiaries,  gains and losses are recognized in other comprehensive  income to
the  extent  they are  effective  as  hedges.  All other  gains and  losses  are
recognized in cost of sales for the Automotive  sector and interest  expense for
the Financial Services sector.  These instruments  usually mature in three years
or less for Automotive sector exposures and longer for Financial Services sector
exposures, consistent with the underlying transactions. The effect of changes in
exchange  rates  may  not be  fully  offset  by  gains  or  losses  on  currency
derivatives, depending on the extent to which the exposures are hedged.

Interest  rate swap  agreements  are used to manage the effects of interest rate
fluctuations by changing the interest rate  characteristics  of specific debt or
pools  of debt to match  the  interest  rate  characteristics  of  corresponding
assets.  These  instruments  mature  consistent  with  underlying debt issues as
identified in Note 13.  The differential paid or received on interest rate swaps
is recognized on an accrual  basis as an adjustment to interest  expense.  Gains
and losses on  terminated  interest  rate swaps are  deferred  and  reflected in
interest expense over the remaining term of the underlying debt.

                                      FS-9



NOTE 1.  Accounting Policies (continued)
----------------------------

Ford has a commodity  hedging program that uses primarily  forward contracts and
options to manage the effects of changes in commodity  prices on the  Automotive
sector's  results.  Gains and losses are  recognized in cost of sales during the
settlement period of the related transactions.

The Company will adopt Statement of Financial  Accounting  Standards (SFAS) 133,
"Accounting for Derivative  Instruments and Hedging",  on January 1, 2001. Based
on present  interpretation  of this new standard,  the Company estimates that it
will  record a  transition  adjustment  that will  reduce 2001 net income by $70
million and reduce other comprehensive income by $550 million.  Adoption of this
standard  will  result  in  non-cash   adjustments   to  income  and  equity  by
unpredictable  amounts,  based  mainly on periodic  changes in  interest  rates,
exchange rates, and commodity prices.  The amount of these non-cash effects will
be disclosed each quarter.

Foreign Currency Translation
----------------------------

Assets  and  liabilities  of  non-U.S.  subsidiaries  for which  the  functional
currency is other than the U.S. dollar are generally  translated to U.S. dollars
at  end-of-period  exchange  rates.  The  effects of this  translation  for most
non-U.S.  subsidiaries are reported in other comprehensive income. Remeasurement
of assets and liabilities of non-U.S.  subsidiaries  that use the U.S. dollar as
their  functional  currency  are  included  in income as  transaction  gains and
losses. Income statement elements of all non-U.S. subsidiaries are translated to
U.S. dollars at average-period exchange rates. Also included in income are gains
and losses  arising from  transactions  denominated in a currency other than the
functional currency of the entity involved. Net transaction gains and losses, as
described above,  decreased income from continuing operations by $115 million in
2000,  increased income from continuing  operations by $308 million in 1999, and
increased income from continuing operations by $84 million in 1998.

Impairment of Long-Lived Assets and Certain Identifiable Intangibles
--------------------------------------------------------------------

The Company evaluates the carrying value of goodwill for potential impairment on
an ongoing basis. Such evaluations  compare operating income before amortization
of  goodwill  to the  amortization  recorded  for the  operations  to which  the
goodwill relates. When appropriate,  the Company also periodically evaluates the
carrying value of long-lived  assets and long-lived assets to be disposed of for
potential impairment.  The Company considers projected future operating results,
cash  flows,  trends,  and other  circumstances  in making  such  estimates  and
evaluations.

Goodwill
--------

Goodwill  represents the excess of the purchase price over the fair value of the
net assets of acquired companies and is amortized using the straight-line method
for  periods  of up to 40  years.  Total  goodwill  included  in the  Automotive
sector's  other assets was $5.8 billion at December 31, 2000 and $5.7 billion at
December 31, 1999. Total goodwill  included in the Financial  Services  sector's
other  assets  was $993  million  at  December  31,  2000 and  $970  million  at
December 31, 1999.

Company-Obligated  Mandatorily  Redeemable  Preferred Securities of a Subsidiary
Trust
-------------------------------------------------------------------------------

During  1995,  Ford Motor  Company  Capital  Trust I (the  "Trust")  issued $632
million  of  its  9% Trust  Originated   Preferred  Securities  (the  "Preferred
Securities")  in a one-for-one  exchange for 25,273,537  shares of the Company's
outstanding  Series B Depositary  Shares (the "Depositary  Shares").  Concurrent
with  the  exchange  and the  related  purchase  by Ford of the  Trust's  Common
Securities  (the  "Common  Securities"),  the  Company  issued to the Trust $651
million aggregate principal amount of its 9% Junior Subordinated  Debentures due
December 2025 (the  "Debentures").  The sole assets of the Trust are and will be
the  Debentures.  The  Debentures  are  redeemable,  in whole or in part, at the
Company's  option on or after December 1, 2002, at a redemption price of $25 per
Debenture  plus  accrued  and  unpaid  interest.  If  the  Company  redeems  the
Debentures, or upon maturity of the Debentures,  the Trust is required to redeem
the Preferred Securities and Common Securities at $25 per share plus accrued and
unpaid distributions.

                                     FS-10



NOTE 1.  Accounting Policies (continued)
----------------------------

Ford  guarantees to pay in full to the holders of the Preferred  Securities  all
distributions  and other payments on the Preferred  Securities to the extent not
paid by the Trust  only if and to the  extent  that  Ford has made a payment  of
interest or principal on the  Debentures.  This  guarantee,  when taken together
with Ford's  obligations under the Debentures and the indenture relating thereto
and its obligations  under the Declaration of Trust of the Trust,  including its
obligation  to pay certain  costs and expenses of the Trust,  constitutes a full
and  unconditional  guarantee  by  Ford of the  Trust's  obligations  under  the
Preferred Securities.

NOTE 2.  Discontinued Operation
-------------------------------

On June 28, 2000,  Ford  distributed  130 million shares of Visteon  Corporation
("Visteon"),  which  represented  its  100%  ownership  interest,  by means of a
tax-free spin-off in the form of a dividend on Ford Common and Class B Stock.

Holders of Ford  Common and Class B Stock on the record date  received  0.130933
shares of Visteon common stock for each share of Ford stock, and participants in
U.S.  employee savings plans on the record date received $1.72 in cash per share
of Ford stock,  based on the  volume-weighted  average price of Visteon stock of
$13.1326  per  share on June  28,  2000.  The  total  value of the  distribution
(including  the $365  million  cash  dividend)  was $2.1  billion,  or $1.72 per
diluted share of Ford stock.

As a result of the spin-off of Visteon,  Ford recorded an after-tax loss of $2.3
billion in the second  quarter of 2000.  This loss  represents the excess of the
carrying  value of Ford's net  investment  in Visteon  over the market  value of
Visteon on the distribution date. Ford's financial statements reflect Visteon as
a  "discontinued  operation"  for all  periods  shown.  Through  the date of the
spin-off,  Visteon's net assets were  aggregated in Ford's balance sheet as "net
assets of discontinued operation".

In connection with the spin-off of Visteon, Ford and Visteon have entered into a
series of agreements  that provide for (i) certain hourly  employees  (numbering
approximately  24,000)  working for Visteon  that  remain Ford  employees,  with
Visteon reimbursing Ford for the expenses related thereto, (ii) Ford's retention
of  certain  pension  and  postretirement   benefit  obligations  for  qualified
employees that are or have worked for Visteon, (iii) predetermined pricing terms
for Visteon's products purchased by Ford through 2003, and (iv) reimbursement to
Ford for other post-spin  services provided to Visteon and tax activity incurred
on Visteon's behalf.

Visteon  revenues  included in  discontinued  operations  totaled $10.5 billion,
$19.4 billion,  and $17.8 billion for the years ended  December 31, 2000,  1999,
and 1998, respectively.  Income from discontinued operations for the years ended
December 31, 2000,  1999, and 1998 is reported net of income tax expense of $182
million, $422 million, and $416 million, respectively.

NOTE 3.  Value Enhancement Plan
-------------------------------

On  August  7,  2000,   the  Company   announced   the  final   results  of  its
recapitalization,  known as the Value  Enhancement Plan ("VEP").  Under the VEP,
Ford shareholders  exchanged each of their old Ford Common or Class B shares for
one new  Ford  Common  or Class B share,  as the  case  may be,  plus,  at their
election,  either $20 in cash,  0.748  additional new Ford Common  shares,  or a
combination of $5.17 in cash and 0.555  additional new Ford Common shares.  As a
result of the  elections  made by  shareholders  under the VEP,  the total  cash
elected  was $5.7  billion  and the total  number of new Ford Common and Class B
shares that became issued and outstanding was 1.893 billion.  As a result of the
VEP, approximately $1.2 billion was transferred from capital stock to capital in
excess of par value of stock.

In accordance with generally accepted accounting principles, prior period shares
and earnings per share amounts were not adjusted. 2000 average diluted shares of
1.504 billion were  calculated  based on an average of 1.222 billion  shares for
the period prior to the VEP and an average of 1.9 billion  shares for the period
subsequent to the VEP.

                                     FS-11




NOTE 4.  Marketable and Other Securities
----------------------------------------

Trading  securities are recorded at fair value with unrealized  gains and losses
included in income.  Available-for-sale  securities  are  recorded at fair value
with  net  unrealized  gains  and  losses   reported,   net  of  tax,  in  other
comprehensive  income.  Held-to-maturity  securities  are  recorded at amortized
cost.  Equity  securities that do not have readily  determinable fair values are
recorded  at cost.  The basis of cost  used in  determining  realized  gains and
losses is specific identification.

The fair value of  substantially  all  securities is determined by quoted market
prices.  The estimated fair value of  securities,  for which there are no quoted
market  prices,  is based on similar types of securities  that are traded in the
market. Book value approximates fair value for all securities.

Expected  maturities of debt securities may differ from  contractual  maturities
because  borrowers  may have the  right to call or  prepay  obligations  with or
without penalty.

Automotive Sector
-----------------

Investments in securities at December 31 were as follows (in millions):



                                                                                                            Book/
                                                                    Amortized   Unrealized   Unrealized     Fair
                                                                      Cost        Gains        Losses       Value
                                                                 ------------- ------------ ------------- ---------
                                                                                              
     2000
     ----
     Trading securities                                             $10,214       $73         $  4        $10,283
     Available-for-sale securities - Corporate debt securities        1,480         8            -          1,488
     Held-to-maturity securities                                      1,345         -            -          1,345
                                                                    -------       ---         ----        -------
     Total investments in securities                                $13,039       $81         $  4        $13,116
                                                                    =======       ===         ====        =======

     1999
     ----
     Trading securities                                             $17,243       $56         $123        $17,176
     Available-for-sale securities - Corporate debt securities        1,004         -            8            996
     Held-to-maturity securities                                        771         -            -            771
                                                                    -------       ---         ----        -------
     Total investments in securities                                $19,018       $56         $131        $18,943
                                                                    =======       ===         ====        =======



Proceeds from sales of available-for-sale securities were $4,938 million in 2000
and $2,352  million in 1999.  There were no  material  gains or losses in either
year.  The  available-for-sale  securities  and  held-to-maturity  securities at
December 31, 2000 had contractual  maturities of between one and five years, and
one and four years, respectively.

Financial Services Sector
-------------------------

Investments in securities at December 31, 2000 were as follows (in millions):



                                                                                                         Book/
                                                                 Amortized   Unrealized  Unrealized      Fair
                                                                   Cost         Gains      Losses        Value
                                                               ------------ ----------- ----------- ------------

                                                                                            
     Trading securities                                           $258         $ 1         $ 1          $258

     Available-for-sale securities
     -----------------------------
     Debt securities issued by the U.S.
      government and agencies                                       94           4           -            98
     Municipal securities                                           13           1           -            14
     Debt securities issued by non-U.S. governments                 14           1           -            15
     Corporate debt securities                                     198           4           1           201
     Mortgage-backed securities                                    167           2           2           167
     Equity securities                                              27          34           3            58
                                                                  ----         ---         ---          ----
       Total available-for-sale securities                         513          46           6           553

     Held-to-maturity securities
     ---------------------------
     Debt securities issued by the U.S.
      government and agencies                                        6           -           -             6
     Corporate securities                                            -           -           -             -
                                                                  ----         ---         ---          ----
      Total held-to-maturity securities                              6           -           -             6

       Total investments in securities                            $777         $47         $ 7          $817
                                                                  ====         ===         ===          ====


                                     FS-12



NOTE 4.  Marketable and Other Securities (continued)
----------------------------------------

Investments in securities at December 31, 1999 were as follows (in millions):



                                                                                                       Book/
                                                               Amortized   Unrealized  Unrealized      Fair
                                                                 Cost         Gains      Losses        Value
                                                             ------------ ----------- ------------ ------------

                                                                                            
     Trading securities                                           $190         $ -         $ -          $190

     Available-for-sale securities
     -----------------------------
     Debt securities issued by the U.S.
      government and agencies                                       89           -           3            86
     Municipal securities                                           18           -           1            17
     Debt securities issued by non-U.S. governments                 19           -           -            19
     Corporate securities                                          156           -           6           150
     Mortgage-backed securities                                    202           -           7           195
     Equity securities                                              28          43           2            69
                                                                  ----         ---         ---          ----
       Total available-for-sale securities                         512          43          19           536

     Held-to-maturity securities
     ---------------------------
     Debt securities issued by the U.S.
      government and agencies                                        6           -           -             6
     Corporate securities                                            1           -           -             1
                                                                  ----         ---         ---          ----
      Total held-to-maturity securities                              7           -           -             7

       Total investments in securities                            $709         $43         $19          $733
                                                                  ====         ===         ===          ====



The  amortized  cost  and  fair  value  of  investments  in   available-for-sale
securities  and  held-to-maturity  securities  at  December  31  by  contractual
maturity, were as follows (in millions):


                                                    Available-for-sale       Held-to-maturity
                                                  ----------------------  ----------------------
                                                    Amortized     Fair      Amortized     Fair
                                                       Cost      Value         Cost      Value
                                                  ------------ ---------  ------------ ---------
                                                                              
     2000
     ----
     Due in one year or less                          $ 19       $ 19           $2         $2
     Due after one year through five years             132        133            -          -
     Due after five years through ten years             79         81            3          3
     Due after ten years                                93         96            1          1
     Mortgage-backed securities                        167        169            -          -
     Equity securities                                  23         55            -          -
                                                      ----       ----           --         --
       Total                                          $513       $553           $6         $6
                                                      ====       ====           ==         ==

     1999
     ----
     Due in one year or less                          $  -       $  -           $-         $-
     Due after one year through five years             119        118            3          3
     Due after five years through ten years             53         51            3          3
     Due after ten years                               110        104            1          1
     Mortgage-backed securities                        202        195            -          -
     Equity securities                                  28         68            -          -
                                                      ----       ----           --         --
       Total                                          $512       $536           $7         $7
                                                      ====       ====           ==         ==



Proceeds from sales of available-for-sale  securities were $557 million in 2000,
and $1.1 billion in 1999. There were no material gains or losses in either year.

                                     FS-13



NOTE 5.  Finance Receivables - Financial Services Sector
--------------------------------------------------------

Included in finance  receivables at December 31 were net finance receivables and
investment in direct financing leases. The investment in direct financing leases
relates to the leasing of vehicles,  various types of  transportation  and other
equipment, and facilities.

Receivables
-----------
Net finance receivables at December 31 were as follows (in millions):




                                                                 2000         1999
                                                             ------------ ------------
                                                                       
          Retail                                                $ 74,220     $ 70,771
          Wholesale                                               34,303       27,298
          Real estate                                              3,950        3,417
          Other finance receivables                                6,496        5,302
                                                                --------     --------
            Total finance receivables                            118,969      106,788
          Allowance for credit losses                             (1,240)      (1,143)
                                                                --------     --------
            Total net finance receivables                        117,729      105,645
          Other                                                      417          471
                                                                --------     --------
            Net finance and other receivables                   $118,146     $106,116
                                                                ========     ========

          Net finance receivables subject to
           fair value*                                          $117,664     $105,577
          Fair value                                            $118,988     $106,552

- - - - -
*Excludes certain diversified and other receivables of $482 million
 and $539 million at December 31, 2000 and 1999, respectively

Included in finance  receivables  at December  31, 2000 and 1999 were a total of
$2.2 billion and  $2.6 billion,  respectively,  owed by three customers with the
largest receivable  balances.  Other finance receivables  consisted primarily of
commercial and other collateralized loans and accrued interest. Also included in
other finance  receivables at December 31, 2000 and 1999 were  $3.5 billion  and
$3.7 billion,   respectively,   of  accounts  receivable  purchased  by  certain
Financial Services sector operations from Automotive sector operations.  Finance
receivables  that  originated  outside the United States are  $37.6 billion  and
$35.5 billion at December 31, 2000 and 1999, respectively.

Contractual   maturities  of  total  finance  receivables  are  as  follows  (in
millions): 2001 - $75,622; 2002 - $21,517; 2003 - $10,729; thereafter - $11,101.
Experience  indicates that a substantial  portion of the portfolio  generally is
repaid before the contractual maturity dates.

The fair value of most  receivables  was  estimated by  discounting  future cash
flows using an estimated discount rate that reflected the credit,  interest rate
and  prepayment  risks  associated  with  similar  types  of  instruments.   For
receivables with short maturities, the book value approximated fair value.

The Financial  Services  sector has sold  receivables  through  special  purpose
subsidiaries.  The  servicing  portfolio  related  to these  securitized  assets
amounted  to $28.4  billion  and $19.6  billion at  December 31, 2000  and 1999,
respectively.  The Company  retains  certain  beneficial  interests  in the sold
receivables  which are subject to limited recourse  provisions.  These financial
instruments of  $3.7 billion  at December 31, 2000 and  $3.4 billion at December
31, 1999 are included in other assets.

Direct Financing Leases
-----------------------

Net  investment  in direct  financing  leases at  December 31 was as follows (in
millions):



                                                                  2000         1999
                                                              ------------ ------------
                                                                        
          Total minimum lease rentals to be received             $4,922       $4,782
            Less:  Unearned income                                 (923)        (916)
          Loan origination costs                                     58           84
                                                                 ------       ------
            Minimum lease rentals                                 4,057        3,950
          Estimated residual values                               3,081        3,283
            Less:  Allowance for credit losses                     (120)         (51)
                                                                 ------       ------
            Net investment in direct financing leases            $7,018       $7,182
                                                                 ======       ======


Minimum  direct  financing  lease rentals are  contractually  due as follows (in
millions):  2001 - $1,930; 2002 - $1,396; 2003 - $972; 2004 - $472; 2005 - $118;
thereafter - $34.

                                     FS-14



NOTE 6.  Net Investment in Operating Leases
-------------------------------------------

The net  investment  in  operating  leases  relates to the leasing of  vehicles,
various types of  transportation  and other equipment,  and facilities.  The net
investment in operating leases at December 31 was as follows (in millions):



                                                                  2000         1999
                                                              ------------ ------------
                                                                       
          Vehicles and other equipment, at cost                 $ 58,029     $ 53,018
          Lease origination costs                                     53           56
          Accumulated depreciation                               (11,155)     (10,225)
          Allowances for credit losses                              (334)        (378)
                                                                --------     --------
            Net investment in operating leases                  $ 46,593     $ 42,471
                                                                ========     ========


Minimum  rentals on  operating  leases  are  contractually  due as  follows  (in
millions):  2001 - $8,785;  2002 - $6,441;  2003 - $3,259;  2004 - $415;  2005 -
$176; thereafter - $300.

Depreciation  expense  for  assets  subject  to  operating  leases  is  provided
primarily  on the  straight-line  method  over the term of the lease in  amounts
necessary to reduce the carrying  amount of the asset to its estimated  residual
value.  Depreciation  rates and amounts are based on  assumptions as to used car
prices at lease  termination and the number of vehicles that will be returned to
the  Company.  Estimated  and actual  residual  values are reviewed on a regular
basis to  determine  whether  depreciation  amounts are  appropriate.  Gains and
losses upon  disposal of the assets also are included in  depreciation  expense.
Depreciation expense was as follows: $9.2 billion in 2000, $8.8 billion in 1999,
and $8.4 billion in 1998.

NOTE 7.  Allowance for Credit Losses
------------------------------------

An allowances  for credit losses is estimated and  established as required based
on  historical  experience  and other  factors that affect  collectibility.  The
allowance  for  estimated   credit  losses  includes  a  provision  for  certain
non-homogeneous impaired loans. Impaired loans are measured based on the present
value of expected future cash flows discounted at the loan's effective  interest
rate. Finance receivables and lease investments are charged to the allowance for
credit  losses  when an  account  is deemed  to be  uncollectible,  taking  into
consideration  the  financial  condition  of  the  borrower,  the  value  of the
collateral,  recourse to  guarantors  and other  factors.  Recoveries on finance
receivables and lease  investments  previously  charged-off as uncollectible are
credited to the allowance for credit losses.

Changes in the allowance for credit losses were as follows (in millions):



                                                                  2000         1999         1998
                                                              ------------ ------------ ------------
                                                                                 
          Beginning balance                                      $1,572       $1,577      $ 3,476
          Provision for credit losses                             1,706        1,211        1,489
          Total charge-offs and recoveries:
            Charge-offs                                          (1,618)      (1,287)      (1,640)
            Recoveries                                              300          275          262
                                                                 ------       ------      -------
            Net losses                                           (1,318)      (1,012)      (1,378)
          Other changes                                            (266)        (204)      (2,010)*
                                                                 ------       ------      -------
            Ending balance                                       $1,694       $1,572      $ 1,577
                                                                 ======       ======      =======

- - - - -
*Other changes includes $1,892 million to reflect the spin-off of
 The Associates

                                     FS-15



NOTE 8. Inventories - Automotive Sector
---------------------------------------

Inventories at December 31 were as follows (in millions):



                                                                  2000         1999
                                                              ------------ ------------
                                                                        
          Raw materials, work-in-process and supplies            $2,798       $2,035
          Finished products                                       4,716        3,649
                                                                 ------       ------
            Total inventories                                    $7,514       $5,684
                                                                 ======       ======

          U.S. inventories                                       $2,095       $1,811



Inventories  are  stated at the lower of cost or  market.  The cost of most U.S.
inventories is determined by the last-in, first-out ("LIFO") method. The cost of
the remaining  inventories  is determined  primarily by the first-in,  first-out
("FIFO") method.

If the FIFO method had been used instead of the LIFO method,  inventories  would
have been higher by $1.1 billion and $1.0 billion at December 31, 2000 and 1999,
respectively.


NOTE 9. Net Property, Depreciation and Amortization - Automotive Sector
-----------------------------------------------------------------------

Net property at December 31 was as follows (in millions):


                                                                   2000         1999
                                                               ------------ ------------
                                                                       
          Land                                                  $    639     $    529
          Buildings and land improvements                          9,896        9,460
          Machinery, equipment and other                          38,434       37,809
          Construction in progress                                 2,333        1,966
                                                                --------     --------
            Total land, plant and equipment                     $ 51,302     $ 49,764
          Accumulated depreciation                               (24,327)     (22,898)
                                                                --------     --------
            Net land, plant and equipment                       $ 26,975     $ 26,866
          Special tools, net of amortization                      10,533        9,662
                                                                --------     --------
            Net property                                        $ 37,508     $ 36,528
                                                                ========     ========



Property,  equipment,  and special  tools are stated at cost,  less  accumulated
depreciation and  amortization.  Property and equipment placed in service before
January 1, 1993 are  depreciated  using an  accelerated  method that  results in
accumulated  depreciation of  approximately  two-thirds of the asset cost during
the first half of the estimated useful life of the asset. Property and equipment
placed  in  service  after   December  31,  1992  are   depreciated   using  the
straight-line  method of  depreciation  over the  estimated  useful  life of the
asset. On average,  buildings and land  improvements are depreciated  based on a
30-year life;  machinery and equipment are depreciated  based on a 14-year life.
Costs  of  computer  software   developed  or  obtained  for  internal  use  are
capitalized  beginning  January 1, 1999.  Special tools placed in service before
January 1, 1999 are amortized  using an accelerated  method over periods of time
representing the estimated life of those tools.  Special tools placed in service
beginning in 1999 are amortized using the units-of-production method.

Depreciation and amortization expenses were as follows (in millions):


                                                                  2000         1999         1998
                                                              ------------ ------------ ------------
                                                                                  
          Depreciation                                           $3,507       $2,592       $2,301
          Amortization                                            2,451        2,459        2,880
                                                                 ------       ------       ------
            Total                                                $5,958       $5,051       $5,181
                                                                 ======       ======       ======


Maintenance,  repairs, and rearrangement costs are expensed as incurred and were
$1.6 billion in 2000, $1.7 billion in 1999, and $1.7 billion in 1998.

                                     FS-16




NOTE 10.  Income Taxes
----------------------

Income before income taxes,  excluding equity in net income/(loss) of affiliated
companies, the provision for income taxes, and a reconciliation of the provision
for income taxes  compared with the amounts at the U.S.  statutory tax rate, are
as follows:



                                                                  2000         1999         1998
                                                              ------------ ------------ ------------
                                                                                  
          Income before income tax (in millions)
          -------------------------------------
          U.S.                                                  $ 9,559       $9,299       $7,617*
          Non-U.S.                                               (1,241)         537          770
                                                                -------       ------       ------
            Total income before income taxes                    $ 8,318       $9,836       $8,387
                                                                =======       ======       ======

          Provision for income taxes (in millions)
          ---------------------------------------
          U.S. federal                                          $   661       $  581       $  620
          Non-U.S.                                                  760          727          474
          State and local                                           116          117           14
                                                                -------       ------       ------
            Total current income tax provision                    1,537        1,425        1,108
                                                                -------       ------       ------
          U.S. federal                                            2,110        2,088        1,614
          Non-U.S.                                               (1,153)        (455)        (114)
          State and local                                           211          190          152
                                                                -------       ------       ------
            Total deferred income tax provision                   1,168        1,823        1,652
                                                                -------       ------       ------
              Total provision                                   $ 2,705       $3,248       $2,760
                                                                =======       ======       ======

          Reconciliation of the income tax provision
          ------------------------------------------
          Tax provision at U.S. statutory rate                       35 %         35 %         35 %

          Effect of (in points):
            Tax on non-U.S. income                                   (2)          (2)          (1)
            State and local income taxes                              3            2            1
            Other                                                    (3)          (2)          (2)
                                                                -------       ------       ------
              Provision for income taxes                             33 %         33 %         33 %
                                                                =======       ======       ======
- - - - -


* Excludes non-taxable gain on spin-off of The Associates.

Deferred  taxes are  provided for  earnings of non-U.S.  subsidiaries  which are
planned to be remitted.  No provision  for deferred  taxes has been made on $2.0
billion of unremitted earnings (primarily prior to 1998) which are considered to
be  indefinitely  invested in non-U.S.  subsidiaries.  Deferred  taxes for these
unremitted earnings are not practical to estimate.

Deferred  tax  assets  and  liabilities  reflect  the  estimated  tax  effect of
accumulated  temporary  differences between assets and liabilities for financial
reporting  purposes and those  amounts as measured by tax laws and  regulations.
The  components  of deferred tax assets and  liabilities  at December 31 were as
follows (in millions):



                                                                 2000         1999
                                                             ------------ ------------
                                                                       
          Deferred tax assets
          -------------------
          Employee benefit plans                                $ 6,100      $ 5,057
          Dealer and customer allowances and claims               2,364        2,709
          Net operating loss carryforwards                        1,377          740
          Allowance for credit losses                             1,067        1,006
          Tax on unremitted foreign earnings                        567          156
          All other                                               2,329        1,087
          Valuation allowances                                     (171)        (115)
                                                                -------      -------
            Total deferred tax assets                            13,633       10,640

          Deferred tax liabilities
          ------------------------
          Leasing transactions                                    8,306        6,520
          Depreciation and amortization
           (excluding leasing transactions)                       3,924        3,382
          Finance receivables                                     2,593        1,328
          Employee benefit plans                                    962          862
          All other                                               1,593          976
                                                                -------      -------
            Total deferred tax liabilities                       17,378       13,068
                                                                -------      -------
              Net deferred tax liabilities                      $ 3,745      $ 2,428
                                                                =======      =======


Non-U.S.  net operating loss carryforwards for tax purposes were $3.6 billion at
December 31,  2000.  A  substantial  portion of these  losses has an  indefinite
carryforward  period;  the remaining  losses have expiration  dates beginning in
2001. The tax benefit of operating losses is recognized as a deferred tax asset,
subject to an appropriate  valuation  allowance.  Tax benefits of operating loss
carryforwards  are evaluated on an ongoing  basis.  Such  evaluations  include a
review of  historical  and  projected  future  operating  results,  the eligible
carryforward period, and other circumstances.

                                     FS-17



NOTE 11.  Liabilities - Automotive Sector
-----------------------------------------

Current Liabilities
-------------------

Included in accrued liabilities at December 31 were the following (in millions):




                                                                 2000         1999
                                                             ------------ ------------
                                                                       
          Dealer and customer allowances and claims             $11,660      $10,180
          Deferred revenue                                        2,209        2,326
          Employee benefit plans                                  2,029        1,675
          Deferred obligation to AB Volvo (Note 19)               1,585            -
          Postretirement benefits other than pensions             1,076          694
          Salaries, wages and employer taxes                        528          548
          Other                                                   4,428        3,065
                                                                -------      -------
              Total accrued liabilities                         $23,515      $18,488
                                                                =======      =======


Noncurrent Liabilities
----------------------

Included in other liabilities at December 31 were the following (in millions):



                                                                 2000         1999
                                                             ------------ ------------
                                                                       
          Postretirement benefits other than pensions           $14,093      $12,158
          Dealer and customer allowances and claims               6,202        7,158
          Employee benefit plans                                  4,145        4,167
          Unfunded pension obligation                             1,188        1,189
          Deferred obligation to BMW (Note 19)                      741            -
          Minority interests in net assets of subsidiaries            8           86
          Deferred obligation to AB Volvo (Note 19)                   -        1,485
          Other                                                   4,118        3,040
                                                                -------      -------
              Total other liabilities                           $30,495      $29,283
                                                                =======      =======


NOTE 12.  Employee Retirement Benefits
--------------------------------------

Employee Retirement Plans
-------------------------

The  Company  has two  principal  retirement  plans  in the  U.S.  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 U.S. 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.  Ford-UAW  Retirement Plan expense accruals for employees assigned to
Visteon are charged to Visteon.

In general, the Company's plans are funded, with the main exceptions of the U.S.
defined  benefit  plans for  executives  and certain  plans in Germany;  in such
cases, an unfunded liability is recorded.

The Company's policy for funded plans is to contribute  annually,  at a minimum,
amounts required by applicable laws,  regulations,  and union  agreements.  Plan
assets  consist  principally  of  investments in stocks and government and other
fixed income securities.

Postretirement Health Care and Life Insurance Benefits
------------------------------------------------------

The Company and certain of its  subsidiaries  sponsor plans to provide  selected
health care and life  insurance  benefits for retired  employees.  The Company's
U.S.  and Canadian  employees  may become  eligible  for those  benefits if they
retire while working for the Company;  however,  benefits and eligibility  rules
may be modified  from time to time.  The  estimated  cost for these  benefits is
accrued over periods of employee  service on an  actuarially  determined  basis.
Postretirement  health  care and life  insurance  expense  accruals  for  hourly
employees assigned to Visteon and for salaried Visteon employees who met certain
age and service conditions at June 30, 2000 are charged to Visteon. A portion of
U.S.  hourly and salary  retiree  health and life  insurance  benefits  has been
prepaid.  At December 31, 2000,  the market value of this  pre-funding  was $3.1
billion, including $1.4 billion of assets contributed by Visteon to a segregated
trust.

                                     FS-18



NOTE 12.  Employee Retirement Benefits (continued)
--------------------------------------

Increasing the assumed  health care cost trend rates by one percentage  point is
estimated to increase the aggregate  service and interest cost components of net
postretirement   benefit  expense  for  2000  by  about   $250 million  and  the
accumulated postretirement benefit obligation at December 31, 2000 by about $2.8
billion.  A decrease of one  percentage  point would reduce service and interest
costs by $195 million and decrease  the  December  31, 2000  obligation  by $2.3
billion.

Employee Retirement Benefit Expense
-----------------------------------

The Company's  expense for pensions,  retirement  health care and life insurance
was as follows (in millions):



                                                         Pension Benefits
                                   -------------------------------------------------------------
                                            U.S. Plans                   Non-U.S. Plans                    Other Benefits*
                                   ------------------------------ ------------------------------    ------------------------------
                                     2000      1999      1998       2000      1999      1998          2000      1999      1998
                                   -------- --------- ----------- -------- ---------- ----------    --------- --------- ----------
                                                                                             
Costs Recognized in Income
--------------------------
Service cost                       $   495   $   522   $   475    $   405   $   402    $ 324        $  320    $  275    $  213
Interest cost                        2,345     1,714     1,609        918       823      802         1,483       972       946
Expected return on plan
  assets                            (3,281)   (2,475)   (2,208)    (1,162)   (1,026)    (898)         (135)      (82)      (34)
Amortization of:
  Transition (asset)/obligation        (13)      (22)      (23)         7        10       15             -         -         -
  Plan amendments                      742       471       565        133       105      103           (38)      (35)      (32)
  (Gains)/losses and other            (405)      (20)       53         64       183      127            82        77        84
Allocated costs to Visteon             (71)        -         -          -         -        -          (159)        -         -
                                   -------   -------   -------    -------   -------    -----        ------    ------    ------
 Net pension/postretirement
   expense/(income)                $  (188)  $   190   $   471    $   365   $   497    $ 473        $1,553    $1,207    $1,177
                                   =======   =======   =======    =======   =======    =====        ======    ======    ======

Discount rate for expense             7.75%     6.25%     6.75%     6.10%     5.70%     6.50%         7.75%     6.50%     7.00%
Assumed long-term rate of
  return on assets                    9.00%     9.00%     9.00%     9.40%     9.30%     9.20%         6.00%     6.00%     6.20%
Initial health care cost
  trend rate                             -         -         -         -         -         -          8.75%     7.00%     6.60%
Ultimate health care cost
  trend rate                             -         -         -         -         -         -          5.00%     5.00%     5.00%
Number of years to ultimate
  trend rate                             -         -         -         -         -         -             8         9        10

-  -  -  -  -
*Postretirement health care and life insurance benefits

Pension expense in 2000 decreased  primarily as a result of increased  return on
plan assets and higher discount rates.

                                     FS-19



NOTE 12.  Employee Retirement Benefits (continued)
--------------------------------------

The year-end status of these plans was as follows (in millions):


                                                                  Pension Benefits
                                                  --------------------------------------------------
                                                        U.S. Plans              Non-U.S. Plans              Other Benefits*
                                                  ------------------------  ------------------------    ------------------------
                                                     2000        1999          2000        1999            2000        1999
                                                  ---------- -------------  ---------- -------------    ----------- ------------
                                                                                                   
Change in Benefit Obligation
----------------------------
 Benefit obligation at January 1                   $31,846     $33,003       $16,484     $16,312         $ 15,744    $ 15,230
  Service cost                                         535         650           405         434              320         275
  Interest cost                                      2,388       2,099           918         888            1,483         971
  Amendments                                             -       3,113           232         413             (226)          8
  Special programs                                     141         109            83          48               54          46
  Net acquisitions/(divestitures)                      (89)         74           357         784            3,714          37
  Plan participant contributions                        45          46            71          67                -           -
  Benefits paid                                     (2,273)     (1,950)         (744)       (698)          (1,055)       (742)
  Foreign exchange translation                           -           -        (1,117)       (951)               2          22
  Actuarial loss/(gain)                                689      (5,298)          229        (813)           3,338        (103)
                                                   -------     -------       -------     -------         --------    --------
 Benefit obligation at December 31                 $33,282     $31,846       $16,918     $16,484         $ 23,374    $ 15,744
                                                   =======     =======       =======     =======         ========    ========

Change in Plan Assets
---------------------
 Fair value of plan assets at January 1            $40,845     $38,417       $15,432     $13,235         $  1,258    $  1,501
  Actual return on plan assets                         979       4,239           233       2,131              168          55
  Company contributions                                  8           6           185         217            1,935          99
  Special programs                                      (7)        (32)           (1)          -                -           -
  Net acquisitions/(divestitures)                       90          43           520         671              425           -
  Plan participant contributions                        45          46            71          67                -           -
  Benefits paid                                     (2,273)     (1,950)         (744)       (698)            (651)       (397)
  Foreign exchange translation                           -           -        (1,041)       (447)               -           -
  Other                                                143          76            59         256                -           -
                                                   -------     -------       -------     -------         --------    --------
 Fair value of plan assets at December 31          $39,830     $40,845       $14,714     $15,432         $  3,135    $  1,258
                                                   =======     =======       =======     =======         ========    ========
Funded Status of the Plan
-------------------------
  Plan assets in excess of/(less than)
    projected benefits                             $ 6,548     $ 8,999       $(2,204)    $(1,052)        $(20,239)   $(14,486)
  Unamortized:
    Transition (asset)/obligation                      (17)        (36)           94         164                -           -
    Prior service cost                               3,912       4,548           814         833             (231)        (46)
    Net (gains)/losses                              (8,540)    (12,037)          336      (1,053)           4,850       1,330
                                                   -------     -------       -------     -------         --------    --------
      Net amount recognized                        $ 1,903     $ 1,474       $  (960)    $(1,108)        $(15,620)   $(13,202)
                                                   =======     =======       =======     =======         ========    ========

Amounts Recognized in the
Balance Sheet Consists of Assets/(Liabilities)
----------------------------------------------
  Prepaid assets                                   $ 2,856     $ 2,288       $ 1,040     $ 1,064         $      -    $      -
  Accrued liabilities                               (1,244)     (1,118)       (2,900)     (3,061)         (15,620)    (13,202)
  Intangible assets                                    116         170           490         519                -           -
  Deferred income tax                                   65          46            80          84                -           -
  Accumulated other comprehensive income               110          88           330         286                -           -
                                                   -------     -------       -------     -------         --------    --------
    Net amount recognized                          $ 1,903     $ 1,474       $  (960)    $(1,108)        $(15,620)   $(13,202)
                                                   =======     =======       =======     =======         ========    ========

Pension Plans in Which Accumulated Benefit
Obligation Exceeds Plan Assets at December 31
---------------------------------------------
  Projected benefit obligation                     $ 1,173     $ 1,109       $ 5,424     $ 5,721
  Accumulated benefit obligation                     1,085       1,021         5,174       5,366
  Fair value of plan assets                             62          54         2,751       2,837

Assumptions as of December 31
-----------------------------
  Discount rate                                       7.50%       7.75%         6.10%       6.10%            7.50%       7.75%
  Expected return on assets                           9.50%       9.00%         8.80%       9.40%            6.00%       6.00%
  Average rate of increase in compensation            5.20%       5.20%         4.20%       4.90%               -           -
  Initial health care cost trend rate                    -           -             -           -             8.97%       8.75%
  Ultimate health care cost trend rate                   -           -             -           -             5.00%       5.00%
  Number of years to ultimate trend rate                 -           -             -           -                7           8

-  -  -  -  -
*Postretirement health care and life insurance benefits

Postretirement  health care and life  insurance  obligations  increased  in 2000
primarily  as a result of  retention  of  obligations  previously  allocated  to
Visteon and higher than expected cost trends.

                                     FS-20



NOTE 13.  Debt
--------------

The fair value of debt was  estimated  based on quoted  market prices or current
rates for similar debt with the same remaining maturities.

Automotive Sector
-----------------

Debt at December 31 was as follows (in millions):


                                                                         Weighted Average
                                                                          Interest Rate*             Book Value
                                                                      ------------------------ ------------------------
                                                          Maturity       2000        1999         2000        1999
                                                        ------------- ----------- ------------ ----------- ------------
                                                                                             
   Debt payable within one year
   ----------------------------
   Short-term debt                                                        9.0%       14.3%      $   225     $ 1,001
   Long-term debt payable within one year                                                            52         337
                                                                                                -------     -------
     Total debt payable within one year                                                             277       1,338

   Long-term debt                                       2002-2097         7.5%        7.5%       11,769      10,398
   --------------                                                                              --------     -------

       Total debt                                                                               $12,046     $11,736
                                                                                                =======     =======

   Fair value                                                                                   $11,970     $13,528


- - - - -
*Excludes the effect of interest rate swap agreements;  change in 2000 primarily
reflects settlement of short-term debt in South America.

Long-term  debt  at  December  31,  2000  included  maturities  as  follows  (in
millions): 2001 - $52 (included in current liabilities); 2002 - $78; 2003 - $90;
2004 - $128; 2005 - $600; thereafter - $10,873.

Included in  long-term  debt at December 31, 2000 and 1999 were  obligations  of
$11,426 million and  $10,057 million,  respectively,  with fixed interest rates,
and $343 million and  $341 million,  respectively,  with variable interest rates
(generally based on LIBOR or other  short-term  rates).  Obligations  payable in
foreign  currencies  at  December 31,  2000 and 1999 were $663  million and $516
million, respectively.

Financial Services Sector
-------------------------

Debt at December 31 was as follows (in millions):

                                                               Weighted Average
                                                                         Interest Rate*             Book Value
                                                                      ---------------------- --------------------------
                                                          Maturity      2000        1999        2000          1999
                                                        ------------- ---------- ----------- ------------ -------------
                                                                                           
   Debt payable within one year
   ----------------------------
   Unsecured short-term debt                                                                 $  1,904     $  1,853
   Commercial paper                                                                            44,596       44,605
   Other short-term debt                                                                        6,234        4,970
                                                                                             --------     --------
     Total short-term debt                                              6.8%        5.9%       52,734       51,428
   Long-term debt payable within one year                                                      13,658       20,974
                                                                                             --------     --------
     Total debt payable within one year                                                        66,392       72,402

   Long-term debt
   --------------
   Secured indebtedness                                 2002-2021       8.3%        8.3%            3            3
   Unsecured senior indebtedness
     Notes and bank debt                                2002-2078       6.9%        6.4%       85,731       64,543
     Debentures                                                                                     -          508
     Unamortized discount                                                                        (108)         (87)
                                                                                             --------     --------
       Total unsecured senior indebtedness                                                     85,623       64,964
   Unsecured subordinated indebtedness
     Notes                                              2002-2021       8.2%        6.6%        1,500        2,558
     Unamortized discount                                                                          (8)          (8)
                                                                                             --------     --------
       Total unsecured subordinated indebtedness                                                1,492        2,550
                                                                                             --------     --------
         Total long-term debt                                                                  87,118       67,517
                                                                                             --------     --------
           Total debt                                                                        $153,510     $139,919
                                                                                             ========     ========

   Fair value                                                                                $155,862     $139,979

- - - - -
*Excludes the effect of interest rate swap agreements

                                     FS-21




NOTE 13.  Debt (continued)
--------------

Information  concerning  short-term borrowings (excluding long-term debt payable
within one year) is as follows (in millions):



                                                                 2000         1999         1998
                                                             ------------ ------------ ------------
                                                                                 
          Average amount of short-term borrowings               $47,788      $55,096      $49,099
          Weighted-average short-term interest rates per
          annum (average year)                                    6.6%         5.7%         5.7%

          Average remaining term of commercial paper
          At December 31                                       34 days      24 days      31 days


Long-term  debt  at  December  31,  2000  included  maturities  as  follows  (in
millions):  2001 - $13,658; 2002 - $19,313; 2003 - $18,224; 2004 - $11,725; 2005
- $15,904; thereafter - $21,952.

Included in  long-term  debt at December 31, 2000 and 1999 were  obligations  of
$53.7 billion  and  $46.5 billion,  respectively,  with fixed interest rates and
$33.4 billion and  $21.0 billion,  respectively,  with variable  interest  rates
(generally based on LIBOR or other  short-term  rates).  Obligations  payable in
foreign  currencies  at  December  31,  2000 and 1999 were  $33 billion  and $31
billion, respectively.  These obligations were issued primarily to fund non-U.S.
business operations.

Outstanding  commercial paper at December 31, 2000 totaled $42.3 billion at Ford
Credit and $2.3 billion at Hertz, with an average remaining  maturity of 35 days
and 18 days, respectively.

Agreements  to manage  exposures  to  fluctuations  in  interest  rates  include
primarily interest rate swap agreements.  At December 31, 2000, these agreements
decreased the weighted-average  interest rate on long-term debt to 6.7% compared
with 6.9% excluding these agreements,  and effectively decreased the obligations
subject  to  variable  interest  rates to $22.8  billion;  the  weighted-average
interest rate on  short-term  debt  excluding  these  agreements  did not change
materially.   At   December   31,   1999,   these   agreements   decreased   the
weighted-average  interest  rate on long-term  debt to 6.2%,  compared with 6.4%
excluding these agreements, and effectively decreased the obligations subject to
variable interest rates to $199 million; the  weighted-average  interest rate on
short-term debt excluding these agreements did not change materially.

Support Facilities
------------------

At December 31, 2000, Ford had long-term  contractually  committed global credit
agreements  under which  $8.4 billion  is available from various banks;  87% are
available through June 30, 2005. The entire  $8.4 billion may be used, at Ford's
option, by any affiliate of Ford; however, any borrowing by an affiliate will be
guaranteed by Ford.  Ford also has the ability to transfer,  on a  nonguaranteed
basis,  $8.1 billion of such credit lines in varying portions to Ford Credit and
FCE Bank plc.

At December 31, 2000, the Financial Services sector had a total of $27.7 billion
of  contractually  committed  support  facilities  (excluding  the $8.1  billion
available under Ford's global credit  agreements).  Of these  facilities,  $23.9
billion are  contractually  committed global credit agreements under which $19.3
billion  and $4.6  billion  are  available  to Ford  Credit  and FCE  Bank  plc,
respectively,  from various banks; 55% and 64%, respectively, of such facilities
are  available  through June 30, 2005.  The entire $19.3 billion may be used, at
Ford Credit's  option,  by any  subsidiary  of Ford Credit,  and the entire $4.6
billion may be used,  at FCE Bank plc's  option,  by any  subsidiary of FCE Bank
plc. Any  borrowings by such  subsidiaries  will be guaranteed by Ford Credit or
FCE Bank plc, as the case may be. At December 31, 2000, $173 million of the Ford
Credit global facilities were in use and $130 million of the FCE Bank plc global
facilities were in use. Other than the global credit  agreements,  the remaining
portion of the Financial Services Sector support facilities at December 31, 2000
consisted  of  $2.5  billion  of  contractually   committed  support  facilities
available  to Hertz in the U.S.  and  $1.3 billion  of  contractually  committed
support facilities available to various affiliates outside the U.S.; at December
31,  2000,   approximately  $0.9  billion  of  these  facilities  were  in  use.
Furthermore,  banks provide  $1.4 billion of liquidity facilities to support the
asset-backed commercial paper program of a Ford Credit sponsored special purpose
entity.

                                     FS-22



NOTE 14.  Capital Stock
-----------------------

At December  31,  2000,  all general  voting  power was vested in the holders of
Common Stock and the holders of Class B Stock, voting together without regard to
class.  At that date,  the holders of Common Stock were entitled to one vote per
share and, in the aggregate, had 60% of the general voting power; the holders of
Class B Stock  were  entitled  to such  number of votes per share as would  give
them,  in the  aggregate,  the remaining  40% of the general  voting  power,  as
provided in the Company's Restated Certificate of Incorporation.

The Restated  Certificate  of  Incorporation  provides that all shares of Common
Stock and  Class B Stock  share  equally  in  dividends  (other  than  dividends
declared with respect to any outstanding Preferred Stock), except that any stock
dividends  are payable in shares of Common Stock to holders of that class and in
Class B Stock to holders of that class. Upon liquidation,  subject to the rights
of any other class or series of stock having a preference on  liquidation,  each
share of  Common  Stock  will be  entitled  to the  first  $0.50  available  for
distribution to holders of Common Stock and Class B Stock, each share of Class B
Stock  will be  entitled  to the next $1.00 so  available,  each share of Common
Stock will be entitled to the next $0.50 so  available  and each share of Common
and Class B Stock will be entitled to an equal amount thereafter.

For a discussion of Ford's recapitalization effected in August 2000, see Note 3.

On  January 9,  1998,  all  outstanding  shares of Series A  Depositary  Shares,
representing  1/1,000 of a share of Series A  Cumulative  Convertible  Preferred
Stock,  were redeemed at a price of $51.68 per  Depositary  Share plus an amount
equal to accrued and unpaid dividends.

Series B Depositary Shares,  representing  1/2,000 of a share of $1.00 par value
Series B Cumulative  Preferred Stock,  have a liquidation  preference of $25 per
Depositary  Share.  Shares  outstanding at December 31, 2000 numbered  7,096,688
Depositary  Shares.  Dividends  are  payable at a rate of  $2.0625  per year per
Depositary  Share.  Series B Cumulative  Preferred Stock is not convertible into
shares of Common Stock of the Company.  On and after  December 1, 2002, and upon
satisfaction  of certain  conditions,  the stock is  redeemable  for cash at the
option of Ford, in whole or in part, at a redemption price equivalent to $25 per
Depositary  Share,  plus an amount  equal to the sum of all  accrued  and unpaid
dividends.

In 1998, pursuant to an offer to purchase all Depositary Shares representing its
Series B Cumulative  Preferred Stock at a price of $31.40 per Depositary  Share,
the Company purchased a total of 13,229,775 Depositary Shares.

The  Series B  Cumulative  Preferred  Stock  ranks  (and any  other  outstanding
Preferred  Stock of the Company would rank) senior to the Common Stock and Class
B Stock in respect of dividends and liquidation rights.

Changes  to the  number  of shares  of  capital  stock  issued  for the  periods
indicated were as follows (shares in millions):


                                                                                                Preferred
                                                                Common       Class B    -------------------------
                                                                 Stock        Stock      Series A     Series B
                                                              ------------ ------------ ------------ ------------
                                                                                            

          Issued at December 31, 1997                            1,132          71        0.003         0.010

          Changes:
          1998 - Conversion and Redemption of Series A
                   Preferred Stock                                   8                   (0.003)
               - Employee benefit plans and other                   11
               - Repurchase of Series B Preferred Stock                                                (0.006)
          2000 - Value Enhancement Plan                            686
                                                                 -----         ---        -----         -----
             Net change                                            705           -       (0.003)       (0.006)
                                                                 -----         ---        -----         -----
               Issued at December 31, 2000                       1,837          71        0.000         0.004
                                                                 =====         ===        =====         =====


          Authorized at December 31, 2000                        6,000         530        Total Preferred: 30



                                     FS-23



NOTE 15.  Stock Options
-----------------------

The Company has stock options  outstanding  under the 1990  Long-Term  Incentive
Plan and the 1998  Long-Term  Incentive  Plan.  These Plans were approved by the
stockholders.  No further grants may be made under the 1990 Plan.  Grants may be
made under the 1998 Plan through April 2008. In general, options granted in 1997
under the 1990 Plan and subsequent years under the 1998 Plan become  exercisable
33%  after one year from the date of  grant,  66% after two  years,  and in full
after three years. In general, options granted prior to 1997 under the 1990 Plan
become  exercisable  25% after  one year  from the date of grant,  50% after two
years,  75% after three years,  and in full after four years.  Options under the
Plans expire after 10 years from the date of grant.  Certain  participants  were
granted  accompanying  Stock  Appreciation  Rights  under the Plans which may be
exercised in lieu of the related options.  Under the Plans, a Stock Appreciation
Right entitles the holder to receive,  without  payment,  the excess of the fair
market value of the Common Stock on the date of exercise  over the option price,
either  in  Common  Stock  or cash or a  combination.  In  addition,  grants  of
Performance/Contingent Stock Rights were made with respect to 1.2 million shares
in 2000,  1.2 million shares in 1999, and 1.4 million shares in 1998. The number
of shares ultimately  awarded will depend on the extent to which the performance
targets  specified  in each Right is  achieved,  individual  performance  of the
recipients,  and other factors,  as determined by the Compensation  Committee of
the Board of Directors.

Under the 1998 Plan,  up to 2% of Common  Stock  issued as of December 31 of any
year may be made  available  for stock options and other plan awards in the next
succeeding calendar year. That limit may be increased up to 3% in any year, with
a corresponding  reduction in shares  available for grants in future years.  Any
unused portion of the 2% limit for any calendar year may be carried  forward and
made   available   for  Plan   awards   in   succeeding   calendar   years.   At
December 31, 2000,  the number of unused shares  carried  forward  aggregated to
43.1 million shares.
Information concerning stock options is as follows (shares in millions):



                                                       2000                   1999                    1998
                                              ---------------------- ----------------------- -----------------------
                                                          Weighted-              Weighted-               Weighted-
                                                           Average                Average                 Average
                                                          Exercise                Exercise                Exercise
Shares subject to option                        Shares      Price      Shares      Price       Shares      Price
------------------------                      --------- ------------ ----------- ----------- ----------- -----------
                                                                                        
Outstanding at beginning of period              75.3      $32.66       70.9       $25.67       50.0       $28.44
New grants (based on fair value of
 Common Stock at dates of grant)                15.8       41.02       14.9        57.84       12.7        58.07
Adjustment*                                     71.4                                           24.8
Exercised**                                     (6.9)      15.15       (9.1)       20.26      (13.7)       19.97
Surrendered upon exercise of Stock
 Appreciation Rights                            (0.2)       9.05       (0.8)       21.14       (2.5)       22.79
Terminated and expired                          (1.7)      35.75       (0.6)       37.10       (0.4)       33.58
                                               -----                   ----                    ----
Outstanding at end of period                   153.7***    19.16       75.3        32.66       70.9        25.67
Outstanding but not exercisable                (53.4)                 (33.5)                  (34.9)
                                               -----                   ----                    ----
   Exercisable at end of period                100.3       15.59       41.8        23.51       36.0        19.53
                                               =====                   ====                    ====

- - - - -
  *Outstanding stock options and related exercise prices were adjusted to
   preserve the intrinsic value of options as a result of the Visteon spin-off
   and Value Enhancement Plan in 2000, and The Associates spin-off in 1998.
** Exercised at option prices ranging from $5.75 to $23.87 during 2000, $10.43
   to $44.75 during 1999, and $10.43 to $32.69 during 1998.
***Included  70.6 and  83.1  million  shares  under  the 1990 and 1998  Plans,
   respectively,  at option prices ranging from $5.75 to $35.79 per share.  At
   December 31, 2000, the weighted-average  remaining exercise period relating
   to the outstanding options was 6.5 years.

                                     FS-24



NOTE 15.  Stock Options  (continued)
-----------------------

The estimated fair value as of date of grant of options  granted in 2000,  1999,
and 1998, using the Black-Scholes option-pricing model, was as follows:


                                                                     2000        1999        1998
                                                                 ----------- ----------- -----------
                                                                                  
          Estimated fair value per share of
            options granted during the year                         $6.27*     $17.53      $9.25

          Assumptions:
            Annualized dividend yield                                4.9%        3.2%        4.1%
            Common Stock price volatility                           38.8%       36.5%       28.1%
            Risk-free rate of return                                 6.3%        5.2%        5.7%
            Expected option term (in years)                            5           5           5

          -----
          *Estimated fair value at date of grant adjusted
          for the Value Enhancement Plan.

The  Company  measures  compensation  cost  using the  intrinsic  value  method.
Accordingly,  and because option exercise price is set at fair value at the date
of  grant,  no  compensation  cost for stock  options  has been  recognized.  If
compensation  cost had been  determined  based on the  estimated  fair  value of
options  granted since 1995, the Company's net income and income per share would
have been reduced to the pro forma amounts indicated below:


                                               2000                   1999                    1998
                                      ---------------------- ---------------------- -----------------------
                                          As         Pro         As        Pro          As         Pro
                                       Reported     Forma*    Reported    Forma*     Reported     Forma*
                                      ----------- ---------- ---------------------- -----------------------
                                                                               
     Net income (in millions)           $3,467      $3,343     $7,237     $7,129      $22,071    $22,014

     Income per share
     ----------------
       Basic                            $ 2.34      $ 2.26     $ 5.99     $ 5.90      $ 18.17    $ 18.12
       Diluted                          $ 2.30      $ 2.22     $ 5.86     $ 5.77      $ 17.76    $ 17.71

       - - - - -
     *The pro forma  disclosures  may not be  representative  of the  effects on
     reported  net income and income per share for future  periods  because only
     stock options that were granted beginning in 1995 are included in the above
     table.  The estimated fair value,  before tax, of options  granted in 2000,
     1999,  and  1998  was  $172  million,   $256  million,  and  $162  million,
     respectively.

NOTE 16.  Litigation and Claims
-------------------------------

Various  legal  actions,  governmental   investigations   and   proceedings  and
claims are pending or may be  instituted  or asserted in the future  against the
Company and its subsidiaries,  including those arising out of alleged defects in
the Company's products;  governmental  regulations relating to safety, emissions
and  fuel  economy;  financial  services;  employment-related  matters;  dealer,
supplier and other  contractual  relationships;  intellectual  property  rights;
product  warranties;  and  environmental  matters.  Certain of the pending legal
actions  are, or purport to be, class  actions.  Some of the  foregoing  matters
involve or may involve  compensatory,  punitive,  or  antitrust  or other treble
damage  claims  in  very  large  amounts,   or  demands  for  recall  campaigns,
environmental  remediation  programs,  sanctions,  or  other  relief  which,  if
granted, would require very large expenditures.

Litigation  is  subject  to  many  uncertainties,  and the outcome of individual
litigated  matters  is  not  predictable  with  assurance.  Reserves  have  been
established by the Company for certain of the matters discussed in the foregoing
paragraph where losses are deemed probable. It is reasonably possible,  however,
that some of the matters discussed in the foregoing paragraph for which reserves
have not been  established  could be decided  unfavorably  to the Company or the
subsidiary  involved  and could  require the Company or such  subsidiary  to pay
damages or make other  expenditures in amounts or a range of amounts that cannot
be estimated at December 31, 2000. The Company does not reasonably expect, based
on its  analysis,  that such  matters  would  have a  material  effect on future
consolidated  financial  statements  for a  particular  year,  although  such an
outcome is possible.

                                     FS-25


NOTE 17.  Commitments and Contingencies
---------------------------------------

At December 31, 2000, the Company had the following  minimum rental  commitments
under non-cancelable  operating leases (in millions):  2001 - $678; 2002 - $543;
2003 - $421; 2004 - $284; 2005 - $203;  thereafter - $798. These amounts include
rental  commitments  related to the sale and  leaseback  of  certain  Automotive
sector machinery and equipment. Rental expense for all operating leases was $873
million in 2000; $847 million in 1999; and $747 million in 1998.

NOTE 18.  Financial Instruments
-------------------------------

Estimated  fair  value  amounts  have been  determined  using  available  market
information and various  valuation  methods depending on the type of instrument.
In evaluating the fair value information,  considerable  judgment is required to
interpret  the market data used to develop the  estimates.  The use of different
market  assumptions  and/or different  valuation  techniques may have a material
effect on the estimated  fair value  amounts.  Further,  it should be noted that
fair value at a particular  point in time gives no  indication of future gain or
loss, or what the dimensions of that gain or loss are likely to be.

Balance Sheet Financial Instruments
-----------------------------------

Information  about  specific  valuation  techniques and estimated fair values is
provided throughout the Notes to Consolidated  Financial Statements.  Book value
and estimated fair value amounts at December 31 were as follows (in millions):


                                                       2000                    1999
                                             ----------------------- -----------------------
                                                  Book        Fair        Book        Fair      Fair Value
                                                  Value      Value       Value       Value      Reference
                                             ------------ ---------- ----------- ----------- -------------
                                                                                  
          Automotive Sector
          Marketable securities                 $ 13,116    $ 13,116    $ 18,943    $ 18,943     Note 4
          Debt                                    12,046      11,970      11,736      13,528     Note 13

          Financial Services Sector
          Marketable securities                 $    817    $    817    $    733    $    733     Note 4
          Receivables                            117,664     118,988     105,577     106,552     Note 5
          Debt                                   153,510     155,862     139,919     139,979     Note 13



Foreign Currency, Interest Rate, and Commodity Instruments
----------------------------------------------------------

The fair value of foreign currency, interest rate, and commodity instruments was
estimated using current market rates provided by outside quotation services. The
notional amount (the contract amount,  not the amount at risk),  book value, and
estimated fair value at December 31 were as follows (in millions):



                                                              Book Value                 Fair Value
                                           Notional    --------------------------  ------------------------
                                           Amount         Asset      Liability        Asset     Liability
                                        -------------- ---------- ---------------  ---------- -------------
                                                                                
          2000
          Interest rate products           $139,536     $  101      $   72          $  818     $  293
          Currency products                  51,606      1,351       2,238           1,048      1,821
          Commodity products                  2,836         93          18              75         23

          1999
          Interest rate products           $125,329     $  103      $   48          $  331     $  322
          Currency products                  39,908        760       1,460             291      1,298
          Commodity products                  3,020        256           -             219          -



Counterparty Credit Risk
------------------------

Ford manages its foreign  currency,  interest rate,  and commodity  counterparty
credit risks by limiting  exposure to and by monitoring the financial  condition
of each  counterparty.  The  amount  of  exposure  Ford  may  have  to a  single
counterparty on a worldwide basis is limited by company policy.  In the unlikely
event  that a  counterparty  fails to meet  the  terms  of a  foreign  currency,
interest  rate, or commodity  instrument,  the Company's  risk is limited to the
fair value of the instrument.

                                     FS-26



NOTE 19.  Acquisitions, Dispositions and Restructurings
-------------------------------------------------------

Automotive Sector
-----------------

Acquisitions
------------

     Purchase of Land Rover Business - On June 30, 2000, Ford purchased the Land
     Rover  business  from  the  BMW  Group  for  approximately   $2.6  billion.
     Approximately two-thirds of the purchase price was paid at time of closing;
     the remainder will be paid in 2005 (Note 11). The acquisition  involves the
     entire Land Rover line of products,  and related  assembly and  engineering
     facilities. It does not include Rover's passenger car business or financial
     services business.

     The acquisition has been accounted for as a purchase.  The assets acquired,
     liabilities  assumed,  and the  results  of  operations  since  the date of
     acquisition are included in Ford's  financial  statements on a consolidated
     basis.

     The purchase price for Land Rover has been allocated to the assets acquired
     and  liabilities  assumed  based  on the  estimated  fair  value  as of the
     acquisition  date. The excess of the purchase price over the estimated fair
     value of net assets  acquired is  approximately  $775  million and is being
     amortized  on a  straight-line  basis  over 40  years.  Value  assigned  to
     identified  intangible  assets is  approximately  $275 million and is being
     amortized on a straight-line basis over periods ranging from 8 to 40 years.
     The  purchase  price  allocation  included a write-up of  inventory to fair
     value;  the sale of this inventory in the third quarter of 2000 resulted in
     a one-time increase in cost of sales of $106 million after tax.

     Assuming the Land Rover  acquisition had taken place on January 1, 2000 and
     1999, Ford's total  (Automotive and Financial  Services) pro forma revenue,
     net income,  and earnings  per share for the years ended  December 31, 2000
     and 1999 would not have been materially affected.

     Purchase of AB Volvo's Worldwide  Passenger Car Business ("Volvo Car") - On
     March 31, 1999,  Ford purchased Volvo Car for approximately  $6.45 billion.
     The  acquisition  price  consisted  of a cash payment of  approximately  $2
     billion on March 31, 1999,  a deferred  payment  obligation  to AB Volvo of
     approximately  $1.6 billion  due March 31,  2001 (Note  11),  and Volvo Car
     automotive net indebtedness of approximately $2.9 billion.  Most automotive
     indebtedness was repaid on April 12, 1999.

     The acquisition has been accounted for as a purchase. The assets purchased,
     liabilities  assumed,  and the  results  of  operations  since  the date of
     acquisition  are included in our  financial  statements  on a  consolidated
     basis.

     The purchase price for Volvo Car has been allocated to the assets  acquired
     and  liabilities  assumed  based on the  estimated  fair  values  as of the
     acquisition  date. The excess of the purchase price over the estimated fair
     value of net assets  acquired is  approximately  $2.5  billion and is being
     amortized  on a  straight-line  basis  over 40  years.  Value  assigned  to
     identified  intangible  assets is  approximately  $400 million and is being
     amortized  on a  straight-line  basis over  periods  ranging  from 12 to 40
     years.  The purchase price  allocation  included a write-up of inventory to
     fair  value;  the sale of this  inventory  in the  second  quarter  of 1999
     resulted in a one-time increase in cost of sales of $146 million after-tax.

     Purchase of Kwik-Fit  Holdings plc - During the third quarter of 1999, Ford
     completed  the  purchase  of all the  outstanding  stock  of  Kwik-Fit  plc
     ("Kwik-Fit").  At the  time,  Kwik-Fit  was  Europe's  largest  independent
     vehicle  maintenance  and light repair  chain.  The  acquisition  price was
     approximately  $1.6 billion and consisted of cash payments of approximately
     $1.4  billion  and  loan  notes  to  certain   Kwik-Fit   shareholders   of
     approximately $200 million,  redeemable  beginning on April 30, 2000 and on
     any subsequent interest payment date.

     The acquisition has been accounted for as a purchase. The assets purchased,
     liabilities  assumed, and the results of operations since June 30, 1999 are
     included in our financial statements on a consolidated basis.

                                     FS-27



NOTE 19.  Acquisitions, Dispositions and Restructurings (continued)
-------------------------------------------------------

     The purchase price for Kwik-Fit has been  allocated to the assets  acquired
     and  liabilities  assumed  based on the  estimated  fair  values  as of the
     acquisition  date. The excess of the purchase price over the estimated fair
     value of the net assets acquired is approximately $1.1 billion and is being
     amortized  on a  straight-line  basis  over 30  years.  Value  assigned  to
     identified  intangible  assets is  approximately  $400 million and is being
     amortized  on a  straight-line  basis over  periods  ranging  from 10 to 30
     years.

     Assuming the Volvo Car and Kwik-Fit acquisitions had taken place on January
     1, 1999 and 1998,  Ford's total  (Automotive  and  Financial  Services) pro
     forma  revenue,  net  income,  and  earnings  per share for the years ended
     December 31, 1999 and 1998 would not have been materially affected.

European Charges
----------------

Following an extensive  business review of the Ford brand Automotive  operations
in Europe,  the Company recorded a pre-tax charge in Automotive cost of sales of
$1.6 billion in the second  quarter of 2000.  This charge  included $1.1 billion
for asset  impairments and $468 million for  restructuring  costs. The effect on
after-tax  earnings was $1 billion.  As of December  31, 2000,  we have spent or
utilized approximately $150 million related to the restructuring charge.

The asset impairment  charge,  attributable to excess capacity related to Ford's
performance in the competitive and regulatory  environment in Europe,  reflected
the write-down of certain  long-lived  assets from their carrying value to their
estimated fair value,  as determined by an  independent  valuation of Ford brand
Automotive operations in Europe.

The restructuring  charge included employee separation costs of $426 million and
other  exit-related  costs  of  $42  million.  Employee  separation  included  a
workforce  reduction of about 3,300  employees  (2,900  hourly and 400 salaried)
related to the planned  cessation of vehicle  production at the Dagenham  (U.K.)
Body and Assembly Plant

Nemak Joint Venture
-------------------

During the  fourth  quarter of 2000,  Ford  recorded  in cost of sales a pre-tax
charge of $205 million  ($133  million  after  taxes)  related to the fair value
transfer of its Windsor  Aluminum Plant,  Essex Aluminum Plant,  and its Casting
Process  Development  Center for an increased equity interest in its Nemak Joint
Venture.  The new joint  venture is reflected in Ford's  consolidated  financial
statements on an equity basis.

Dissolution of AutoEuropa Joint Venture
---------------------------------------

Effective  January 1, 1999,  Ford's joint venture for the production of minivans
with Volkswagen AG in Portugal  (AutoEuropa)  was dissolved  resulting in a $255
million  pre-tax gain ($165 million  after taxes).  The gain was recorded in the
first quarter 1999 and credited to cost of sales.

Write-Down of Kia Motors Corporation
------------------------------------

During  the  fourth  quarter of 1998,  Ford  recorded  a pre-tax  charge of $111
million  ($86 million  after taxes) to write-off  its net exposure to Kia Motors
Corporation.  The  write-off  of Ford's  exposure was recorded in cost of sales.
Ford's share of Mazda Motor Corporation's exposure was recorded in equity in net
income of affiliated companies.

Batavia/ZF Friedrichshafen AG Joint Venture
-------------------------------------------

During the  fourth  quarter of 1998,  Ford  recorded  in cost of sales a pre-tax
charge of $112  million  ($73  million  after  taxes)  related to the fair value
transfer of its Batavia (Ohio) Transmission Plant to a new joint venture company
formed  by Ford and ZF  Friedrichshafen  AG of  Germany.  The joint  venture  is
reflected in Ford's consolidated financial statements on an equity basis.

                                     FS-28




NOTE 19.  Acquisitions, Dispositions and Restructurings (continued)
-------------------------------------------------------

Restructurings
--------------

Ford recorded a pre-tax charge of $688 million ($447 million after taxes) in the
fourth quarter of 1998,  reflecting  retirement and separation  program  actions
that  were  completed  during  1998  and  1999.  These  special   voluntary  and
involuntary  programs  reduced the  workforce by 1,947  persons in North America
(all  salaried),  1,951 in Europe  (1,304  hourly and 647 salaried) and 4,650 in
South America (4,400 hourly and 250 salaried).  The costs were primarily charged
to the Automotive sector.

Financial Services Sector
-------------------------

Associates First Capital Corporation ("The Associates")
-------------------------------------------------------

During the second  quarter of 1998,  the Company  completed a spin-off of Ford's
80.7% (279.5  million  shares)  interest in The  Associates.  As a result of the
spin-off of The Associates, Ford recorded a gain of $15,955 million in the first
quarter of 1998 based on the fair value of The Associates as of the record date,
March 12,  1998.  The  spin-off  qualified  as a tax-free  transaction  for U.S.
federal income tax purposes.

NOTE 20.  Cash Flows
--------------------

The  reconciliation of net income to cash flows from operating  activities is as
follows (in millions):



                                                         2000                     1999                    1998
                                                ------------------------ ------------------------------------------------
                                                             Financial                Financial               Financial
                                                Automotive   Services    Automotive   Services   Automotive   Services
                                                ----------- ------------ ----------- ---------- ------------ ------------
                                                                                           
Net income from continuing operations            $ 3,624     $ 1,786      $ 4,986     $ 1,516     $ 4,049    $ 17,319
Adjustments to reconcile net income
 to cash flows from operating activities:
  Depreciation and amortization                    5,397       9,452        5,244       9,298       5,279       8,624
  European charges (depreciation and
   amortization)                                   1,100           -            -           -           -           -
  Losses/(earnings) of affiliated
   companies in excess of dividends
   remitted                                           86          17          (14)         25          91          (2)
  Provision for credit and
   insurance losses                                    -       1,963            -       1,465           -       1,798
  Foreign currency adjustments                       (58)          -          284           -        (192)          -
  Net (purchases)/sales of trading
   Securities                                      6,284         122        2,316        (157)     (5,434)       (205)
  Provision for deferred income taxes                706       1,449          258       1,565         345       1,307
  Gain on spin-off of The Associates
   (Note 19)                                           -           -            -           -           -     (15,955)
Changes in assets and liabilities:
  Decrease/(increase) in accounts
   receivable and other current assets              (509)       (695)        (822)       (331)      1,164      (1,189)
  Decrease/(increase) in inventory                (1,369)          -          955           -        (173)          -
  Increase/(decrease) in accounts payable
   and accrued and other liabilities               2,444       1,509        1,154      (1,213)      2,479         890
Other                                                602        (146)         490         372         641         891
                                                 -------     -------      -------     -------     -------    --------
Cash flows from operating activities             $18,307     $15,457      $14,851     $12,540     $ 8,249    $ 13,478
                                                 =======     =======      =======     =======     =======    ========



The Company considers all highly liquid investments purchased with a maturity of
three months or less, including short-term time deposits and government,  agency
and  corporate  obligations,  to be cash  equivalents.  Automotive  sector  cash
equivalents at December 31, 2000 and 1999 were  $2.9 billion  and  $3.1 billion,
respectively;  Financial  Services sector cash  equivalents at December 31, 2000
and 1999 were $1.0 billion and $1.1 billion, respectively.  Cash flows resulting
from futures contracts,  forward contracts and options that are accounted for as
hedges of identifiable  transactions  are classified in the same category as the
item being hedged.

Cash paid for interest and income taxes was as follows (in millions):




                                                                    2000        1999        1998
                                                                ----------- ----------- -----------
                                                                                  
          Interest                                                $10,354      $8,381      $9,039
          Income taxes                                              2,031         844       1,456


                                     FS-29



NOTE 21.  Segment Information
-----------------------------

Ford has identified three primary operating segments:  Automotive,  Ford Credit,
and Hertz. Segment selection was based upon internal  organizational  structure,
the way in which these operations are managed and their performance evaluated by
management and Ford's Board of Directors, the availability of separate financial
results, and materiality considerations. Segment detail is summarized as follows
(in millions):



                                                               Financial Services Sector
                                                           -----------------------------------
                                                 Auto-        Ford                   Other        Elims/
                                                motive       Credit       Hertz     Fin Svcs      Other       Total
                                               ----------  -----------  ---------- -----------  ----------- ----------
                                                                                          
    2000
    ----
    Revenues
      External customer                        $141,230    $ 23,412      $ 5,057    $   342     $     23    $170,064
      Intersegment                                3,783         194           30        154       (4,161)          -
                                               --------    --------      -------    -------     --------    --------
        Total Revenues                         $145,013    $ 23,606      $ 5,087    $   496     $ (4,138)   $170,064
                                               ========    ========      =======    =======     ========    ========
    Income
      Income before taxes                      $  5,267    $  2,495      $   581    $  (109)    $      -    $  8,234
      Provision for income tax                    1,597         926          223        (41)           -       2,705
      Income from continuing operations           3,624       1,536          358        (35)         (73)      5,410
    Other Disclosures
      Depreciation/amortization                $  6,497    $  7,846  a/  $ 1,504    $    46     $     56    $ 15,949
      Interest income                             1,649           -            -          -         (161)      1,488
      Interest expense                            1,589       8,970          428        459         (544)     10,902
      Capital expenditures                        7,393         168          291        496            -       8,348
      Unconsolidated affiliates
        Equity in net income/(loss)                 (70)        (22)           -          1            -         (91)
        Investments in                            2,949          79            -          7            -       3,035
      Total assets at year-end                   98,157     174,258       10,620      7,668       (6,282)    284,421

    -------------------------------------------------------------------------------------------------------------------

    1999
    ----
    Revenues
      External customer                        $135,073    $ 20,020      $ 4,695    $   866     $      4    $160,658
      Intersegment                                4,082         340           33        170       (4,625)          -
                                               --------    --------      -------    -------     --------    --------
        Total Revenues                         $139,155    $ 20,360      $ 4,728    $ 1,036     $ (4,621)   $160,658
                                               ========    ========      =======    =======     ========    ========
    Income
      Income before taxes                      $  7,275    $  2,104      $   560    $   (85)    $      -    $  9,854
      Provision for income tax                    2,251         791          224        (18)           -       3,248
      Income from continuing operations           4,986       1,261          336        (15)         (66)      6,502
    Other Disclosures
      Depreciation/amortization                $  5,244    $  7,565  a/  $ 1,357    $   326     $     50    $ 14,542
      Interest income                             1,532           -            -          -         (114)      1,418
      Interest expense                            1,469       7,193          354        633         (623)      9,026
      Capital expenditures                        7,069          82          351        157            -       7,659
      Unconsolidated affiliates
        Equity in net income/(loss)                  35         (25)           -          -            -          10
        Investments in                            2,539          97            -          8            -       2,644
      Total assets at year-end                  102,608     156,631       10,137     12,427      (11,554)    270,249

    -------------------------------------------------------------------------------------------------------------------

    1998
    ----
    Revenues
      External customer                        $118,017    $ 19,095      $ 4,241    $ 1,997     $      -    $143,350
      Intersegment                                3,333         208            9        272       (3,822)          -
                                               --------    --------      -------    -------     --------    --------
        Total Revenues                         $121,350    $ 19,303      $ 4,250    $ 2,269     $ (3,822)   $143,350
                                               ========    ========      =======    =======     ========    ========
    Income
      Income before taxes                      $  5,842    $  1,812      $   465    $16,161  b/ $      -    $ 24,280
      Provision for income tax                    1,743         680          188        149            -       2,760
      Income from continuing operations           4,049       1,084          277     16,060  b/     (102)     21,368
    Other Disclosures
      Depreciation/amortization                $  5,279    $  7,327  a/  $ 1,212    $    54     $     31    $ 13,903
      Interest income                             1,340           -            -          -          (15)      1,325
      Interest expense                              999       6,910          318      1,114         (510)      8,831
      Capital expenditures                        7,252          67          317        120            -       7,756
      Gain on spin-off of
       The Associates                                 -           -            -     15,955            -      15,955
      Unconsolidated affiliates
        Equity in net income/(loss)                 (64)          2            -          -            -         (62)
        Investments in                            2,187          76            -          -            -       2,263
      Total assets at year-end                   85,008     137,248        8,873      6,181       (4,598)    232,712

- - - - -

a/ Includes depreciation of operating leases only.  Other types of
   depreciation/amortization for Ford Credit are included in the Elims/Other
   column.
b/ Includes  $15,955  million  non-cash  gain (not  taxed) on  spin-off of The
   Associates in the first quarter of 1998 (Note 19).

                                     FS-30



NOTE 21.  Segment Information (continued)
-----------------------------

"Other  Financial  Services"  data is an aggregation  of  miscellaneous  smaller
Financial  Services  sector  business  components,  including  Ford  Motor  Land
Development   Corporation,   Ford  Leasing  Development  Company,  Ford  Leasing
Corporation,  and Granite Management Corporation.  Also included is data for The
Associates, which was spun-off from Ford in 1998.

"Eliminations/Other"   data  includes  intersegment  eliminations  and  minority
interest   calculations.   Data   for    "Depreciation/amortization"    includes
depreciation   of  fixed  assets  and  assets   subject  to  operating   leases,
amortization of special tools, and amortization of intangible  assets.  Interest
income for the operating  segments in the Financial  Services sector is reported
as "Revenue".

Information concerning principal geographic areas was as follows (in millions):



          Geographic Areas                            United                      All         Total
                                                      States       Europe        Other       Company
                                                   ------------ ------------ ------------ -------------
                                                                                
          2000
          ----
          External revenues                          $118,373     $32,132      $19,559      $170,064
          Income from continuing operations             6,009        (862)         263         5,410
          Net property                                 25,930      13,614        6,260        45,804

          1999
          ----
          External revenues                          $111,423     $32,709      $16,526      $160,658
          Income from continuing operations             6,008         376          118         6,502
          Net property                                 24,146      13,098        6,719        43,963

          1998
          ----
          External revenues                          $ 99,879     $26,795      $16,676      $143,350
          Income from continuing operations            20,856         445           67        21,368
          Net property                                 22,266       9,774        6,608        38,648



NOTE 22.  Summary Quarterly Financial Data (Unaudited)
------------------------------------------------------
(in millions, except amounts per share)


                                                                 2000                                 1999
                                                  ------------------------------------ ------------------------------------
                                                   First    Second   Third    Fourth    First   Second    Third   Fourth
                                                  Quarter   Quarter Quarter  Quarter   Quarter  Quarter  Quarter  Quarter
                                                  --------- ------- ------- ---------- ------- --------- -------- ---------
                                                                                         
Automotive
  Sales                                           $36,175   $37,366 $32,582  $35,107   $31,597  $35,546  $30,645 $37,285
  Operating income                                  2,332     1,393     565      936     2,083    2,454      737   1,940
Financial Services
  Revenues                                          6,719     7,153   7,482    7,480     5,952    6,361    6,635   6,637
  Income before income taxes                          643       764     856      704       547      689      742     601

Total Company
  Income from continuing operations                 1,932     1,513     888    1,077     1,774    2,058      959   1,711
  Less: Preferred Stock dividend
   Requirements                                         4         3       4        4         4        4        4       3
                                                  -------   ------- -------  -------   -------  -------  ------- -------

  Income attributable
   to Common and
   Class B Stock                                  $ 1,928   $ 1,510 $   884  $ 1,073   $ 1,770  $ 2,054  $   955 $ 1,708
                                                  =======   ======= =======  =======   =======  =======  ======= =======

AMOUNTS PER SHARE OF COMMON
  AND CLASS B STOCK AFTER
  PREFERRED STOCK DIVIDENDS

  Basic income from continuing operations         $  1.61   $  1.26 $  0.54  $  0.58   $  1.47  $  1.70  $  0.79 $  1.42

  Diluted income from continuing operations          1.58      1.24    0.53     0.57      1.43     1.66     0.78    1.39

  Cash dividends                                     0.50      0.50    0.50     0.30      0.46     0.46     0.46    0.50



                                     FS-31









                        Report of Independent Accountants



To the Board of Directors and Stockholders
Ford Motor Company:

In our opinion,  the  accompanying  consolidated  balance  sheet and the related
consolidated  statements of income,  stockholders' equity and cash flows present
fairly, in all material  respects,  the financial position of Ford Motor Company
and  Subsidiaries  at  December  31,  2000 and 1999,  and the  results  of their
operations  and their cash flows for each of the three years in the period ended
December 31, 2000 in conformity with accounting principles generally accepted in
the United States of America.  These financial statements are the responsibility
of the  Company's  management;  our  responsibility  is to express an opinion on
these financial statements based on our audits. We conducted our audits of these
statements  in  accordance  with auditing  standards  generally  accepted in the
United  States of America,  which  require that we plan and perform the audit to
obtain reasonable  assurance about whether the financial  statements are free of
material  misstatement.  An audit includes examining,  on a test basis, evidence
supporting the amounts and  disclosures in the financial  statements,  assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.





/s/PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP
Detroit, Michigan
January 18, 2001


                                     FS-32




                                                          Supplemental Schedule



                        Ford Capital BV and Subsidiaries

                        CONSOLIDATED STATEMENT OF INCOME
                        --------------------------------

              For the Years Ended December 31, 2000, 1999 and 1998
                                  (in millions)

                                                                    2000           1999           1998
                                                                         ------------   ------------   ------------
                                                                                                
Sales (Note 1)                                                             $1,815          $2,057        $1,906

Costs and expenses (Note 1)
Costs of sales                                                              1,691           1,920         1,776
Selling, administrative and other expenses                                    106             122           108
                                                                           ------          ------        ------
  Total costs and expenses                                                  1,797           2,042         1,884

Operating income                                                               18              15            22

Interest income                                                               256             278           334
Interest expense                                                              215             234           270
                                                                           ------          ------        ------
  Net interest income                                                          41              44            64

Income before income taxes                                                     59              59            86

Provision for income taxes (Note 5)                                            26              24            33
                                                                           ------          ------        ------
Income before minority interests                                               33              35            53
Minority interests in net income of subsidiaries                                1               2             3
                                                                           ------          ------        ------
Net income                                                                 $   32          $   33        $   50
                                                                           ======          ======        ======


The accompanying notes are part of the financial statements.

                                     FSS-1



                        Ford Capital BV and Subsidiaries

                           CONSOLIDATED BALANCE SHEET
                           --------------------------

                        As of December 31, 2000 and 1999
                                  (in millions)



                                                                                                2000              1999
                                                                                           ---------------   ----------------
                                                                                                         
ASSETS
Cash and cash equivalents                                                                    $    18           $    49
Receivables - trade, affiliate and other (Note 2)                                                 55               103
Notes receivable, affiliate (Note 15)                                                            411               351
Inventories (Note 3)                                                                              41                35
Deferred income taxes (Note 5)                                                                    24                 5
Other current assets (Note 1)                                                                     28                38
                                                                                             -------           -------
   Total current assets                                                                          577               581

Notes receivable, affiliate (Note 15)                                                          1,391             2,319
Net property (Note 4)                                                                             14                26
Other assets                                                                                     104                59
                                                                                             -------           -------

   Total assets                                                                              $ 2,086           $ 2,985
                                                                                             =======           =======

LIABILITIES AND STOCKHOLDERS' EQUITY
Trade payables                                                                               $    63           $    87
Payables - affiliate and other                                                                    71                43
Accrued liabilities (Note 6)                                                                     156               224
Income taxes payable                                                                              31                17
Debt payable within one year (Note 8)                                                            567               933
                                                                                             -------           -------
   Total current liabilities                                                                     888             1,304

Long-term debt (Note 8)                                                                          900             1,450
Deferred tax liability (Note 5)                                                                   16                19
Other liabilities                                                                                 10                13
                                                                                             -------           -------
   Total liabilities                                                                           1,814             2,786

Minority interests                                                                                 1                 6

Stockholders' equity
Capital stock, 255,140 shares issued with a par value of $593 each and 623,392 shares
issued with a par value of $133 each (Note 9)                                                    236               236
Capital in excess of par value (Note 9)                                                           72                 -
Accumulated other comprehensive income/(loss)                                                    (15)               11
Accumulated deficit                                                                              (22)              (54)
                                                                                             -------           -------
   Total stockholders' equity                                                                    271               193
                                                                                             -------           -------

   Total liabilities and stockholders' equity                                                $ 2,086           $ 2,985
                                                                                             =======           =======
- - - -


The accompanying notes are part of the financial statements.

                                     FSS-2




                        Ford Capital BV and Subsidiaries

                      CONSOLIDATED STATEMENT OF CASH FLOWS
                      ------------------------------------

              For the Years Ended December 31, 2000, 1999 and 1998
                                  (in millions)



                                                                2000              1999                1998
                                                          -----------------  ---------------      --------------
                                                                                           
Cash and cash equivalents at January 1                     $     49           $    11               $   16

Cash flows from operating activities
 (Note 14)                                                       29                39                  (15)

Cash flows from investing activities
 Acquisitions of other companies (Note 13)                      (31)                -                    -
 Changes in notes receivable                                    868                29                1,375
 Other                                                           20               (18)                  14
                                                           --------           -------               ------
   Net cash provided by investing activities                    857                11                1,389

Cash flows from financing activities
 Cash dividends                                                   -                 -                  (63)
 Capital stock redemption                                         -                 -                 (259)
 Changes in short-term debt                                      17                 -                    -
 Principal payments on other debt                              (935)              (14)              (1,055)
                                                           --------           -------               ------
   Net cash used by financing activities                       (918)              (14)              (1,377)

Effect of exchange rate changes on cash                           1                 2                   (2)
                                                           --------           -------               ------

   Net (decrease)/increase in cash and
    cash equivalents                                            (31)               38                   (5)
                                                           --------           -------               ------

Cash and cash equivalents at December 31                   $     18           $    49               $   11
                                                           ========           =======               ======



The accompanying notes are part of the financial statements.

                                     FSS-3



                        Ford Capital BV and Subsidiaries

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                 ----------------------------------------------

              For the Years Ended December 31, 2000, 1999 and 1998
                                  (in millions)



                                                        Capital in                     Accumulated
                                                        excess of                         Other
                                            Capital     par value      Accumulated    Comprehensive
                                             Stock       of stock        Deficit      Income/ (loss)        Total
                                            --------- --------------- ------------- ------------------ ----------------
                                                                                        
YEAR ENDED DECEMBER 31, 1998
----------------------------
Balance at beginning of year                $  495     $     -        $   (74)         $     28        $   449

Comprehensive income
 Net income                                                                50                               50
 Foreign currency translation                                                                 3              3
                                                                                                       -------
  Comprehensive income                                                                                      53

Common Stock redemption                       (259)                                                       (259)
Cash dividends                                                            (63)                             (63)
                                            ------      ------        -------          --------        -------
Balance at end of year                      $  236      $    -        $   (87)         $     31        $   180
                                            ======      ======        =======          ========        =======

YEAR ENDED DECEMBER 31, 1999
----------------------------
Balance at beginning of year                $  236      $    -        $   (87)         $     31        $   180

Comprehensive income
 Net income                                                                33                               33
 Foreign currency translation                                                               (20)           (20)
                                                                                                       -------
  Comprehensive income                                                                                      13

                                            ------      ------        -------          --------        -------
Balance at end of year                      $  236      $    -        $   (54)         $     11        $   193
                                            ======      ======        =======          ========        =======

YEAR ENDED DECEMBER 31, 2000
----------------------------
Balance at beginning of year                $  236      $    -        $   (54)         $     11        $   193

Comprehensive income
 Net income                                                                32                               32
 Foreign currency translation                                                               (26)           (26)
                                                                                                       -------
  Comprehensive income                                                                                       6

Capital contribution                                        72                                              72
                                            ------      ------        -------          --------        -------
Balance at end of year                      $  236      $   72        $   (22)         $    (15)       $   271
                                            ======      ======        =======          ========        =======



The accompanying notes are part of the financial statements.

                                     FSS-4



NOTE 1.  Accounting Policies
----------------------------

Description of Business
-----------------------

Ford Capital BV and its  subsidiaries are engaged in the importation and sale of
vehicles  and parts in the markets of Belgium,  Denmark,  Finland,  Netherlands,
Norway and Poland. A subsidiary company which produced vehicles in Poland ceased
manufacturing operations during 2000.

Principles of Consolidation
---------------------------

The consolidated  financial statements include all majority-owned  subsidiaries.
Use of estimates and  assumptions as determined by management is required in the
preparation of  consolidated  financial  statements in conformity with generally
accepted accounting principles. Actual results could differ from those estimates
and assumptions. The functional currency of Ford Capital BV is U.S. dollars. For
purposes of Notes to Financial  Statements,  "the Company" means Ford Capital BV
and its  majority-owned  consolidated  subsidiaries  unless the context requires
otherwise.  Certain amounts for prior periods are reclassified,  if required, to
conform to present period presentations.

Revenue Recognition
-------------------

Sales are recorded by the Company when products are shipped to dealers and other
customers,  except  as  described  below.  Estimated  costs for  approved  sales
incentive  programs  normally are recognized as sales  reductions at the time of
revenue  recognition.  Estimated  costs for sales  incentive  programs  approved
subsequent to the time that related sales were recorded are recognized  when the
programs are approved.

Sales through dealers to certain daily rental companies,  where the daily rental
company has an option to require the Company to repurchase  vehicles  subject to
certain conditions,  are recognized over the period of daily rental service in a
manner  similar  to lease  accounting.  The  carrying  value of these  vehicles,
included in other current  assets,  was $24 million at December 31, 2000 and $26
million at December 31, 1999.

Other Costs
-----------

Advertising  and sales  promotion  costs are expensed as  incurred.  Advertising
costs were $65 million in 2000, $58 million in 1999 and $44 million in 1998.

Estimated costs related to product warranty are accrued at the time of sale.

Derivative Financial Instruments
--------------------------------

The  Company  uses  derivative  financial  instruments  to  manage  exposure  to
fluctuations  in  exchange  rates.  All  derivative  financial  instruments  are
classified  as  "held  for  purposes   other  than   trading";   company  policy
specifically   prohibits  the  use  of  leveraged  derivatives  or  use  of  any
derivatives for speculative purposes.

The Company has two  long-term  receivable  instruments  with Ford Motor Company
that are denominated in British pounds and two long-term debt obligations to the
public market denominated in U.S. dollars.  The Company purchased cross currency
pound-to-dollar swaps to offset the exchange exposure. Terms of the swaps mirror
those contained in the receivable instruments.

Statement  of  Financial   Accounting  Standards  (SFAS)  133,  "Accounting  for
Derivative Instruments and Hedging" will be adopted on January 1, 2001. Based on
present  interpretation of this new standard, the Company estimates that it will
record a transition  adjustment that will reduce 2001 other comprehensive income
by $63 million.

                                     FSS-5




NOTE 1.  Accounting Policies (continued)
----------------------------

Foreign Currency Translation
----------------------------

Assets  and  liabilities  of  subsidiaries  are  translated  to U.S.  dollars at
end-of-period  exchange rates.  The effects of this  translation are reported in
other comprehensive income. Remeasurement of assets and liabilities of locations
that use the U.S. dollar as their functional  currency are included in income as
transaction  gains and losses.  Income  statement  elements of subsidiaries  are
translated to U.S. dollars at  average-period  exchange rates.  Also included in
income are gains and losses arising from transactions  denominated in a currency
other than the functional currency of the entity involved. Net transaction gains
and losses, as described above, decreased net income by $19 million in 2000, $25
million in 1999, and $4 million in 1998

Impairment of Long-Lived Assets and Certain Identifiable Intangibles
--------------------------------------------------------------------

The Company evaluates the carrying value of goodwill for potential impairment on
an ongoing basis. Such evaluations  compare operating income before amortization
of  goodwill  to the  amortization  recorded  for the  operations  to which  the
goodwill relates. The Company also periodically  evaluates the carrying value of
long-lived  assets  and  long-lived  assets  to be  disposed  of  for  potential
impairment.  The Company  considers  projected  future operating  results,  cash
flows, trends, and other circumstances in making such estimates and evaluations.

Goodwill
--------

Goodwill  represents the excess of the purchase price over the fair value of the
net assets of acquired companies and is amortized using the straight-line method
for a period  of 20 years.  Total  goodwill  included  in other  assets  was $14
million at December 31, 2000 and $2 million at December 31, 1999.

NOTE 2.  Allowance for Doubtful Accounts
----------------------------------------

Receivables are disclosed net of allowances for doubtful accounts.  The movement
in the allowance for doubtful accounts is as follows (in millions):


                                                                 2000         1999         1998
                                                             ------------ ------------ ------------
                                                                                  
          Beginning balance                                      $  2         $  2         $  2
          Charge to profit                                          1            1            -
          Write-off of doubtful accounts                            -           (1)           -
          Other, including exchange differences                     1*           -            -
                                                                 ----         ----         ----
          Ending balance                                         $  4         $  2         $  2
                                                                 ====         ====         ====

          *  Includes effect of acquisition of Ford Finland



NOTE 3.  Inventories
--------------------

Inventories at December 31 were as follows (in millions):


                                                                       2000         1999
                                                                   ------------ ------------
                                                                             
               Raw materials, work-in-process and supplies            $   -        $    4
               Finished products                                         41            31
                                                                      -----        ------
                 Total inventories                                    $  41        $   35
                                                                      =====        ======


Inventories  are  stated  at the  lower  of  cost  or  market.  The  cost of the
inventories is determined by the first-in, first-out ("FIFO") method.

                                     FSS-6



NOTE 4.  Net Property & Depreciation
------------------------------------

Net property at December 31 was as follows (in millions):



                                                                     2000        1999
                                                                 ----------- -----------
                                                                        
          Land                                                     $    5     $     6
          Buildings and land improvements                              19          23
          Machinery, equipment and other                               22          24
          Construction in progress                                      -           1
                                                                   ------     -------
            Total land, plant and equipment                        $   46     $    54
          Accumulated depreciation                                    (32)        (28)
                                                                   ------     -------
            Net property                                           $   14     $    26
                                                                   ======     =======



Property  and  equipment  are  stated at cost,  less  accumulated  depreciation.
Property and equipment  placed in service before January 1, 1993 are depreciated
using  an  accelerated  method  that  results  in  accumulated  depreciation  of
approximately  two-thirds  of the  asset  cost  during  the  first  half  of the
estimated  useful life of the asset.  Property and  equipment  placed in service
after  December  31,  1992 are  depreciated  using the  straight-line  method of
depreciation over the estimated useful life of the asset. On average,  buildings
and land  improvements  are  depreciated  based on a  30-year  life.  Furniture,
fixtures  and  equipment  are  depreciated  based on lives  ranging from 8 to 14
years.

NOTE 5.  Income Taxes
---------------------

Income before income taxes, the provision for income taxes, and a reconciliation
of the provision for income taxes  compared with the amounts at the  Netherlands
statutory tax rate, are as follows:



                                                                  2000         1999         1998
                                                              ------------ ------------ ------------
                                                                                  
          Income before income tax (in millions)
          --------------------------------------
          Netherlands                                               (22)          37           72
          Non-Netherlands                                            81           22           14
                                                                 ------       ------       ------
            Total income before income taxes                     $   59       $   59       $   86
                                                                 ======       ======       ======

          Provision for income taxes (in millions)
          ----------------------------------------
          Netherlands
            Current                                              $   (5)      $   15       $   28
            Deferred                                                 (3)          (2)          (3)
                                                                 ------       ------       ------
                                                                     (8)          13           25
          Non-Netherlands
            Current                                                  53           17           (2)
            Deferred                                                (19)          (6)          10
                                                                 ------       ------       ------
                                                                     34           11            8
                                                                 ------       ------       ------
              Total provision                                    $   26       $   24       $   33
                                                                 ======       ======       ======

          Reconciliation of the income tax provision
          ------------------------------------------
          Tax provision at Netherlands statutory rate                35 %         35 %         35 %

          Effect of (in points):
            Penalties                                                 8            -            -
            Nondeductible expense                                     4            4            2
            Subsidiary tax rate difference                           (2)           2            1 %
                                                                 ------       ------       ------
              Provision for income taxes                             45 %         41 %         38 %
                                                                 ======       ======       ======


Deferred  tax  assets  and  liabilities  reflect  the  estimated  tax  effect of
accumulated  temporary  differences between assets and liabilities for financial
reporting  purposes and those  amounts as measured by tax laws and  regulations.
The  components  of deferred tax assets and  liabilities  at December 31 were as
follows (in millions):



                                                                2000         1999
                                                            ------------ ------------
                                                                       
          Deferred tax assets
          -------------------
          Dealer and customer allowances and claims             $   17       $    5
          Other                                                      7            -
                                                                ------       ------
            Total deferred tax assets                               24            5
          Deferred tax liabilities                                 (16)         (19)
                                                                ------       ------
              Net deferred tax assets                           $    8       $  (14)
                                                                ======       ======


                                     FSS-7



NOTE 6.  Liabilities
--------------------

Current Liabilities
-------------------

Included in accrued liabilities at December 31 were the following (in millions):


                                                                2000        1999
                                                             ----------  ---------
                                                                      
          Dealer and customer allowances and claims             $ 93        $ 110
          Interest payable                                        26           44
          State and local taxes                                    7           21
          Payroll accruals                                         6            9
          Other                                                   24           40
                                                                ----        -----
              Total accrued liabilities                         $156        $ 224
                                                                ====        =====



NOTE 7.  Employee Retirement Benefits
-------------------------------------

Employee Retirement Plans
-------------------------

In general,  the Company has separate  plans for hourly and salaried  employees.
The hourly plans provide  noncontributory  benefits  related to employee service
and the salaried plans provide similar noncontributory benefits and contributory
benefits related to pay and service.

In general,  the Company's  plans are funded.  The policy for funded plans is to
contribute  annually,  at  a  minimum,  amounts  required  by  applicable  laws,
regulations and union agreements. Plan assets consist principally of investments
in stocks, and government and other fixed income securities.

Retirement  benefits are provided  under defined  benefit plans for employees of
the sales  operations  of Ford  Belgium  by the  Pension  and  Benefit  Fund for
personnel at Ford companies in Belgium. Employee retirement plan costs allocated
to the sales  operations  of Ford Belgium and charged to  operating  expenses of
Ford Capital BV were as follows (in millions): 2000 - $2; 1999 - $1; 1998 - $2.

Employee Retirement Benefit Expense
-----------------------------------

The company's expense for pensions was as follows (in millions):



                                                                       2000         1999        1998
                                                                    ----------- ----------- -------------
                                                                                     
Costs Recognized in Income
--------------------------
Service cost                                                         $  2        $   2        $  2
Interest cost                                                           4            4           4
Expected return on plan assets                                        (11)         (10)        (11)
Amortization of (gains)/losses and other                               (5)           -           1
                                                                     ----        -----        ----
 Net pension income                                                  $(10)       $  (4)       $ (4)
                                                                     ====        =====        ====


                                     FSS-8



NOTE 7.  Employee Retirement Benefits (continued)
-------------------------------------

The year-end status of these plans was as follows (in millions):



                                                                       2000              1999
                                                                ---------------- ------------------
                                                                              
Change in Benefit Obligation
----------------------------
 Benefit obligation at January 1                                 $    83            $  111
  Service cost                                                         2                 2
  Interest cost                                                        4                 4
  Amendments                                                           2                 2
  Benefits paid                                                       (4)               (4)
  Foreign exchange translation                                        (6)              (16)
  Actuarial loss/(gain)                                                7               (16)
                                                                 -------            ------
 Benefit obligation at December 31                               $    88            $   83
                                                                 =======            ======

Change in Plan Assets
---------------------
 Fair value of plan assets at January 1                          $   191            $  185
  Actual return on plan assets                                        (1)               46
  Company contributions                                              (16)               (9)
  Benefits paid                                                       (4)               (4)
  Foreign exchange translation                                       (14)              (27)
  Other                                                               (1)                -
                                                                 -------            ------
 Fair value of plan assets at December 31                        $   155            $  191
                                                                 =======            ======

Funded Status of the Plan
-------------------------
  Plan assets in excess of
    projected benefits                                           $    68            $  109
  Unamortized:
    Prior service cost                                                 1                 2
    Net (gains)/losses                                               (22)              (57)
                                                                 -------            ------
      Net amount recognized                                      $    47            $   54
                                                                 =======            ======

Amounts Recognized in the
Balance Sheet Consists of Assets
--------------------------------
  Prepaid assets                                                 $    47            $   54
                                                                 =======            ======

Assumptions as of December 31
-----------------------------
  Discount rate                                                     5.75 %            5.75 %
  Expected return on assets                                         6.25 %            6.25 %
  Average rate of increase in compensation                          3.20 %            3.20 %


                                     FSS-9



NOTE 8.  Debt
-------------

The fair value of debt was  estimated  based on quoted  market prices or current
rates for similar debt with the same remaining maturities.

Debt at December 31 was as follows (in millions):



                                                                        Weighted Average
                                                                          Interest Rate             Book Value
                                                                     ------------------------ ------------------------
                                                         Maturity       2000        1999         2000        1999
                                                       ------------- ----------- ------------ ----------- ------------
                                                                                            
  Debt payable within one year
  ----------------------------
  Short-term debt                                                        5.0%         -        $    17     $     -
  Long-term debt payable within one year                                 9.4%        9.4%          550         933
                                                                                               -------     -------
    Total debt payable within one year                                                             567         933

  Long-term debt                                       2002 - 2010       9.7%        9.6%          900       1,450
                                                                                               -------     -------
  --------------
      Total debt                                                                               $ 1,467     $ 2,383
                                                                                               =======     =======

  Fair value                                                                                   $ 1,642     $ 2,487


Long-term  debt at  December  31,  2000 and 1999  were  obligations  with  fixed
interest rates and is guaranteed by Ford Motor Company.  Obligations  payable in
foreign  currencies  at  December 31,  2000 were $17 million and at December 31,
1999  were  $183  million.  There  are no  agreements  to  manage  exposures  to
fluctuations in interest rates. Maturities of the long-term debt are as follows:
2001 - $550 million; 2002 - $400 million; 2010 - $500 million.

NOTE 9.  Capital Stock and Contributions
----------------------------------------

On January 1, 1998,  887,532  shares with a par value of $593 were issued out of
the 1,000,000 authorized.

On October 12, 1998,  the  authorized  share capital was reduced from  1,000,000
shares of par value $593 to 255,140 shares of par values $593 and 643,000 shares
of par value $133 each. At the same time, the Company made a capital  redemption
of $259 million to Ford Motor Company.

In 2000, the Company  received a non-cash  capital  contribution  of $72 million
from Ford Motor Company (Note 13).


NOTE 10.  Litigation and Claims
-------------------------------

In the normal course of business, various legal actions,  proceedings and claims
are made against the Company,  including those arising out of alleged defects in
the products  sold by the Company,  in  contractual  disputes and  environmental
matters.  Litigation  is  subject  to many  uncertainties,  and the  outcome  of
individual  litigated  matters is not predictable with assurance.  Reserves have
been  established  by the Company for certain of these  matters where losses are
deemed probable.

In addition, the Company has made offers to purchase the minority shares of Ford
Motor  Company  AS in  Denmark  and  Oy  Ford  Ab in  Finland.  Certain  of  the
shareholders are disputing the price offered.  In Denmark the Court has stated a
valuation  of the  Company and a share  price,  which all  relevant  parties are
considering.  In  Finland  a formal  valuation  of the Court of  Arbitration  is
awaited.

The Company does not reasonably expect, based on its analysis,  that any adverse
outcome from such matters  would have a material  effect on future  consolidated
financial  statements  for a  particular  year,  although  such  an  outcome  is
possible.

                                     FSS-10



NOTE 11.  Commitments and Contingencies
---------------------------------------

At December 31, 2000, the Company had the following  minimum  rental  commitment
under  non-cancelable  operating leases:  2001 - $2 million;  2002 - $2 million;
2003 - $1 million; 2004 - $1 million; 2005 - $1 million.  Rental expense for all
operating  lease was:  $3 million in 2000,  $4 million in 1999 and $3 million in
1998.

NOTE 12.  Financial Instruments
-------------------------------

Estimated  fair  value  amounts  have been  determined  using  available  market
information and various  valuation  methods depending on the type of instrument.
In evaluating the fair value information,  considerable  judgment is required to
interpret  the market data used to develop the  estimates.  The use of different
market  assumptions  and/or different  valuation  techniques may have a material
effect on the estimated  fair value  amounts.  Further,  it should be noted that
fair value at a particular  point in time gives no  indication of future gain or
loss, or what the dimensions of that gain or loss are likely to be.

Foreign Currency Instruments
----------------------------

The fair value of foreign  currency  instruments  was  estimated  using  current
market rates  provided by outside  quotation  services.  The estimated  notional
amount and fair value of the Company's  currency products at December 31 were as
follows (in millions):


                                                                             Fair Value
                                                                     ----------------------------
                                                   Notional Amount       Asset       Liability
                                                  ------------------ -------------- -------------
                                                                              
          2000                                          $   567         $  26          $ 14
          1999                                          $   900         $   7          $ 58


Counterparty Credit Risk
------------------------

Ford manages its foreign currency by limiting  exposure to and by monitoring the
financial  condition of each counterparty.  The amount of exposure Ford may have
to a single  counterparty on a worldwide basis is limited by company policy.  In
the  unlikely  event  that a  counterparty  fails to meet the terms of a foreign
currency, the Company's risk is limited to the fair value of the instrument.

NOTE 13.  Acquisitions and Restructuring
----------------------------------------

Acquisition of Ford Finland
---------------------------
In March 2000,  Ford Motor Company  transferred  984,469 shares of Ford Finland,
representing its 91.2% ownership interest, to Ford Capital BV. Ford Capital BV's
share of net  assets at the date of  transfer  was $72  million  which  reflects
historical cost. Ford Finland's results and financial  condition are included in
Ford Capital BV's financial statements on a consolidated basis.

Minority Shareholdings Buy-out
------------------------------
During  2000,  Ford  Capital BV acquired  (for a total price of $21 million) the
Common Stock of Ford Finland and Ford  Belgium that it did not  previously  own,
which  represented  approximately  8.8%  and  15.8% of the  economic  interests,
respectively.   Additionally,   the  Company  began  to  acquire  the  11.3%  of
outstanding  Common  Stock of Ford  Denmark  that it did not already  own. As of
December 31, 2000, Ford Capital BV owned  approximately 99.2% of the outstanding
Common Stock of Ford  Denmark.  As a result of these  acquisitions,  the Company
recorded approximately $12 million of goodwill, which is being amortized over 20
years.

Closure of Plonsk Manufacturing Plant
-------------------------------------
In July 2000,  Ford of Poland,  a  subsidiary  of the Company,  ceased  assembly
operations  in its Plonsk Plant.  The related  closure cost charged to income in
2000 was $8 million.

                                     FSS-11



NOTE 14.  Cash Flows
--------------------

The  reconciliation of net income to cash flows from operating  activities is as
follows (in millions):



                                                            2000            1999            1998
                                                        --------------  --------------  -------------
                                                                                 
Net income                                               $    32          $    33         $    50
Adjustments to reconcile net income
 to cash flows from operating activities:
  Depreciation and amortization (2000 Ford Poland
   Closure cost)                                              12                3               2
  Foreign currency adjustments                                19               22               4
  Provision for deferred income taxes                        (22)              (8)              7
Changes in assets and liabilities:
  Decrease/(increase) in accounts
   receivable and other current assets                        71              (59)              2
  Decrease/(increase) in inventory                            (6)              77              (6)
  Increase/(decrease) in accounts payable
   and accrued and other liabilities                         (81)             (30)            (63)
Other                                                          4                1             (11)
                                                         -------         --------        --------
Cash flows from/(used in) operating activities           $    29         $     39        $    (15)
                                                         =======         ========        ========



The Company considers all highly liquid investments purchased with a maturity of
three months or less, including short-term time deposits and government,  agency
and corporate obligations, to be cash equivalents.  Cash equivalents at December
31,  2000 and 1999 were $18 million and $49  million,  respectively.  Cash flows
resulting  from  futures  contracts,  forward  contracts  and  options  that are
accounted for as hedges of identifiable  transactions are classified in the same
category as the item being hedged.

Cash paid for interest and income taxes was as follows (in millions):


                                                                   2000        1999        1998
                                                                ----------- ----------- -----------
                                                                                  
          Interest                                                 $232        $234        $305
          Income taxes                                               30          23           9


NOTE 15.  Related Party transactions
------------------------------------

Purchases of Vehicles and Parts
-------------------------------
The  Company  purchases  vehicles  and parts  from Ford  Motor  Company  and its
subsidiaries.  These purchases  represented 91% of cost of sales in 2000, 82% in
1999 and 86% in 1998. Balances with Ford Motor Company and its subsidiaries were
a payable of $36 million at December 31, 2000 and a receivable of $12 million at
December 31, 1999.

Servicing of Assets between the Company and Ford Credit
-------------------------------------------------------
A Ford Credit  subsidiary buys the majority of receivable  balances for vehicles
and parts. Receivables sold to Ford Credit were (in billions): 2000 - $2.2; 1999
- $2.5; 1998 - $2.2.

Sales of Vehicles to Rental Companies
-------------------------------------
The Company sells vehicles to certain daily rental companies owned by Ford Motor
Company.  The daily  rental  company  has an option to  require  the  Company to
repurchase the vehicles,  subject to certain  conditions (Note 1). Vehicle units
still subject to the repurchase  option at December 31, 2000 and 1999 were 3,600
and 3,900, respectively.

                                     FSS-12



NOTE 15.  Related Party transactions (continued)
------------------------------------

Notes Receivable - Affiliate
----------------------------

Notes receivable comprises (in millions):


                                                                      2000         1999
                                                                   ----------- -------------
                                                                            
          Short-term notes receivable from a subsidiary of Ford
          Motor Company                                               $  411      $  351
                                                                      ======      ======

          Long-term notes receivable from Ford Motor Company:
           U.S. dollar notes redeemable on fixed dates
            between 2000 and 2001.  Fixed interest rates
            varying between 9.125% and 10.125%                           883       1,050
           U.K. pound sterling notes redeemable on fixed
            dates between 2000 and 2010.  Fixed interest
            rates varying between 12.75% and 13.38%                      508       1,200
           Other                                                           -          69
                                                                      ------      ------
            Total long term notes receivable                          $1,391      $2,319
                                                                      ======      ======

          Fair value                                                  $1,500      $2,316


Interest  income on the notes totaled $246 million in 2000, $274 million in 1999
and $325 million in 1998.  Interest  receivable  was $30 million at December 31,
2000 and $50 million at December  31, 1999.  The fair value of notes  receivable
was  estimated  based on quoted market prices or current rates for similar notes
receivable with the same remaining maturities.

                                     FSS-13











                        Report of Independent Accountants



To the Board of Directors and Stockholders
Ford Motor Company:

In our opinion,  the  accompanying  consolidated  balance  sheet and the related
consolidated  statements of income,  stockholders' equity and cash flows present
fairly, in all material respects,  the financial position of Ford Capital BV and
Subsidiaries at December 31, 2000 and 1999, and the results of their  operations
and their cash flows for each of the three  years in the period  ended  December
31, 2000 in conformity  with  accounting  principles  generally  accepted in the
United States of America.  These financial  statements are the responsibility of
the Company's  management;  our responsibility is to express an opinion on these
financial  statements  based on our  audits.  We  conducted  our audits of these
statements  in  accordance  with auditing  standards  generally  accepted in the
United  States of America,  which  require that we plan and perform the audit to
obtain reasonable  assurance about whether the financial  statements are free of
material  misstatement.  An audit includes examining,  on a test basis, evidence
supporting the amounts and  disclosures in the financial  statements,  assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.


/s/PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP
Detroit, Michigan
March 19, 2001


                                     FSS-14







                                  EXHIBIT INDEX


Designation                      Description                                   Method of Filing

                                                                   
Exhibit 3-A          Restated Certificate of Incorporation,              Filed with this Report.
                     dated August 2, 2000.

Exhibit 3-B          By-Laws as amended                                  Filed as Exhibit 3-B to Ford's Quarterly
                     through July 14, 2000.                              Report on Form 10-Q for the quarter
                                                                         ended June 30, 2000.*

Exhibit 4            Form of Deposit Agreement dated as of               Filed as Exhibit 4-E to Ford's
                     October 29, 1992 among Ford,                        Registration Statement No. 33-53092.*
                     Chemical Bank, as Depositary,
                     and the holders from time to time of
                     Depositary Shares, each representing
                     1/2,000 of a share of Ford's
                     Series B Cumulative Preferred Stock.

Exhibit 10-A         Amended and Restated Profit                         Filed as Exhibit 10-A to the Registrant's
                     Maintenance Agreement, dated as of                  Annual Report on Form 10-K for the
                     January 1, 1999, between Ford                       year ended December 31, 1998.*
                     and Ford Credit.

Exhibit 10-B         Executive Separation Allowance Plan                 Filed with this Report.
                     as amended and restated through
                     December 18, 2000 for separations on
                     or after January 1, 1981.**

Exhibit 10-C         Description of Ford practices regarding             Filed as Exhibit 10-I to Ford's
                     club memberships for executives.**                  Annual Report on Form 10-K for the
                                                                         year ended December 31, 1981.*

Exhibit 10-D         Description of Ford practices regarding             Filed as Exhibit 10-J to Ford's
                     travel expenses of spouses of certain               Annual Report on Form 10-K for the
                     executives.**                                       year ended December 31, 1980.*

Exhibit 10-E         Deferred Compensation Plan for                      Filed as Exhibit 10-H-1 to Ford's
                     Non-Employee Directors, as amended                  Annual Report on Form 10-K for the
                     on July 11, 1991.**                                 year ended December 31, 1991.*

Exhibit 10-E-1       Amendments to Deferred Compensation Plan            Filed as Exhibit 10-G-1 to Ford's
                     for Non-Employee Directors, effective as of         Annual Report on Form 10-K for the
                     January 1, 1996.**                                  year ended December 31, 1995.*

Exhibit 10-E-2       Amendment to Deferred Compensation Plan             Filed as Exhibit 10-G-2 to Ford's
                     for Non-Employee Directors, effective as of         Annual Report on Form 10-K for the
                     November 14, 1996.**                                year ended December 31, 1996.*

Exhibit 10-F         Benefit Equalization Plan, as                       Filed with this Report.
                     amended and restated as of
                     December 18, 2000.**



Exhibit 10-G         Description of financial counseling                 Filed as Exhibit 10-N to Ford's
                     services provided to certain executives.**          Annual Report on Form 10-K for the
                                                                         year ended December 31, 1983.*

Exhibit 10-H         Supplemental Executive Retirement Plan,             Filed with this Report.
                     as restated and incorporating amendments
                     through December 18, 2000.**

Exhibit 10-I         Restricted Stock Plan for Non-Employee              Filed as Exhibit 10-P to Ford's
                     Directors adopted by the Board of                   Annual Report on Form 10-K for the
                     Directors on November 10, 1988,                     year ended December 31, 1988.*
                     and approved by the stockholders at
                     the 1989 Annual Meeting.**

Exhibit 10-I-1       Amendment to Restricted Stock Plan for              Filed as Exhibit 10.1 to Ford's
                     Non-Employee Directors, effective as of             Quarterly Report on Form 10-Q for the
                     August 1, 1996.**                                   quarter ended September 30, 1996.*

Exhibit 10-J         1990 Long-Term Incentive Plan,                      Filed as Exhibit 10-R to Ford's
                     amended as of June 1, 1990.**                       Annual Report on Form 10-K for the
                                                                         year ended December 31, 1990.*

Exhibit 10-J-1       Amendment to 1990 Long-Term Incentive               Filed as Exhibit 10-P-1 to Ford's
                     Plan, effective as of October 1, 1990.**            Annual Report on Form 10-K for the
                                                                         year ended December 31, 1991.*

Exhibit 10-J-2       Amendment to 1990 Long-Term Incentive               Filed as Exhibit 10.2 to Ford's
                     Plan, effective as of March 8, 1995.**              Quarterly Report on Form 10-Q for the
                                                                         quarter ended March 31, 1995.*

Exhibit 10-J-3       Amendment to 1990 Long-Term                         Filed as Exhibit 10-M-3 to Ford's
                     Incentive Plan, effective as of                     Annual Report on Form 10-K for the
                     October 1, 1997.**                                  year ended December 31, 1997.*

Exhibit 10-J-4       Amendment to 1990 Long-Term                         Filed as Exhibit 10-M-4 to Ford's
                     Incentive Plan, effective as of                     Annual Report on Form 10-K for the
                     January 1, 1998.**                                  year ended December 31, 1997.*

Exhibit 10-K         Description of Matching Gift Program for            Filed as Exhibit 10-Q to Ford's
                     Non-Employee Directors.**                           Annual Report on Form 10-K for the
                                                                         year ended December 31, 1991.*

Exhibit 10-L         Non-Employee Directors Life Insurance               Filed as Exhibit 10-O to Ford's
                     and Optional Retirement Plan                        Annual Report on Form 10-K for the
                     (as amended as of January 1, 1993).**               year ended December 31, 1994.*



Exhibit 10-M         Description of Non-Employee Directors               Filed as Exhibit 10-S to Ford's
                     Accidental Death, Dismemberment and                 Annual Report on Form 10-K for the
                     Permanent Total Disablement Indemnity.**            year ended December 31, 1992.*

Exhibit 10-N         Agreement dated December 10, 1992                   Filed as Exhibit 10-T to Ford's
                     between Ford and William C. Ford.**                 Annual Report on Form 10-K for the
                                                                         year ended December 31, 1992.*

Exhibit 10-O         Support Agreement dated as of October 1,            Filed as Exhibit 10-T to Ford's
                     1993 between Ford and FCE Bank.                     Annual Report on Form 10-K for the
                                                                         year ended December 31, 1993.*

Exhibit 10-O-1       Amendment No. 1 dated as of November                Filed as Exhibit 10-R-1 to Ford's
                     15, 1995 to Support Agreement between               Annual Report on Form 10-K for the
                     Ford and FCE Bank.                                  year ended December 31, 1995.*

Exhibit 10-P         Select Retirement Plan                              Filed with this Report.
                     As amended and restated through
                     January 1, 2000.**

Exhibit 10-Q         Deferred Compensation Plan,                         Filed as Exhibit 10-R to Ford's.
                     as amended and restated as of                       Annual Report on Form 10-K for the
                     January 1, 2000.**                                  year ended December 31, 1999.*

Exhibit 10-Q-1       Amendment to Deferred                               Filed as Exhibit 4.2 to Ford's
                     Compensation Plan effective                         Registration Statement No. 333-
                     as of April 12, 2000.**                             56660.*

Exhibit 10-Q-2       Amendment to Deferred                               Filed as Exhibit 4.3 to Ford's
                     Compensation Plan effective                         Registration Statement No. 333-
                     as of June 1, 2000.**                               56660.*

Exhibit 10-R         Annual Incentive Compensation Plan,                 Filed as Exhibit 10-T to Ford's
                     as amended and restated as of                       Annual Report on Form 10-K for the
                     January 1, 2000.**                                  year ended December 31, 1999.*

Exhibit 10-S         1998 Long-Term Incentive Plan,                      Filed as Exhibit 10-W to Ford's
                     effective as of January 1, 1998.**                  Annual Report on Form 10-K for the
                                                                         year ended December 31, 1997.*

Exhibit 10-S-1       Amendment to 1998 Long-Term Incentive               Filed as Exhibit 10-W-1 to Ford's
                     Plan, effective as of January 1, 1999.**            Annual Report on Form 10-K for
                                                                         the year ended December 31, 1998.*

Exhibit 10-S-2       Amendment to 1998 Long-Term Incentive               Filed as Exhibit 10-U-2 to Ford's
                     Plan, effective as of March 10, 2000.**             Annual Report on Form 10-K for the
                                                                         year ended December 31, 1999.*

Exhibit 10-T         Agreement dated January 13, 1999                    Filed as Exhibit 10-X to Ford's
                     between Ford and Edsel B. Ford II.**                Annual Report on Form 10-K for
                                                                         the year ended December 31, 1998.*


Exhibit 10-U         Description of March 2001 agreement                 Filed with this Report.
                     with Robert L. Rewey.**

Exhibit 10-V         Description of Agreement dated                      Filed with this Report.
                     March 18, 2001 with Wolfgang Reitzle.**

Exhibit 12           Computation of Ratio of Earnings to                 Filed with this Report.
                     Combined Fixed Charges and Preferred
                     Stock Dividends.

Exhibit 21           List of Subsidiaries of Ford                        Filed with this Report.
                     as of March 15, 2001.

Exhibit 23           Consent of Independent Certified Public             Filed with this Report.
                     Accountants.

Exhibit 24           Powers of Attorney.                                 Filed with this Report.

----------------------------
*    Incorporated  by  reference  as an  exhibit  to this  Report  (file  number
     reference 1-3950, unless otherwise indicated)
**   Management contract or compensatory plan or arrangement