AmCham HR Committee Meeting Trade Union Update Adrian Stead HR Director Ford Motor Company ZAO St. Petersburg February 7, 2008

2 Agenda Collective dispute items Collective dispute items Negotiations process Negotiations process Political aspects Political aspects Media management Media management Internal communication Internal communication Managing the Strike Managing the Strike Legal aspects Legal aspects Settlement items Settlement items

3 Collective dispute items At a Delegates’ Conference on 13 Oct 2007, the following main demands were voted for: Base salary to be 7 x living wage in SPb Base salary to be 7 x living wage in SPb 300% OT premium 300% OT premium Pension plan Pension plan Improved redundancy terms Improved redundancy terms Improved new vehicle discount Improved new vehicle discount Combination of jobs premium 50% Combination of jobs premium 50% Working time changes Working time changes Long service premium Long service premium

4 Negotiations process TU started 6 separate disputes, on different days, all running concurrently TU started 6 separate disputes, on different days, all running concurrently Initially tried to start separate conciliation committees and settle demands individually Initially tried to start separate conciliation committees and settle demands individually Nothing in law to prohibit this Nothing in law to prohibit this Eventually, accepted that Administration was only willing to negotiate on a package of items Eventually, accepted that Administration was only willing to negotiate on a package of items

5 Political aspects Strikes planned to start just prior to Duma elections in Dec ‘07 Strikes planned to start just prior to Duma elections in Dec ‘07 Visits by Valentina Ivanova, Duma representative, Chair of Education and Science Committee Visits by Valentina Ivanova, Duma representative, Chair of Education and Science Committee Audio meeting with Maxim Topilin, Head of Department of Labour of RF Govt. Audio meeting with Maxim Topilin, Head of Department of Labour of RF Govt. Much attention from Prosecutor’s Offices, Labour Inspectorate, city/regional govts. Much attention from Prosecutor’s Offices, Labour Inspectorate, city/regional govts.

6 Media management Worked hard to supply fresh, accurate information to the media Worked hard to supply fresh, accurate information to the media Often best to take proactive approach, or risk appearing defensive and weak Often best to take proactive approach, or risk appearing defensive and weak During critical times had on-site Public Affairs representative During critical times had on-site Public Affairs representative Tracked internet blogs, Union websites, press and radio stations Tracked internet blogs, Union websites, press and radio stations

7 Internal communications Issued 13 employee bulletins during collective dispute Issued 13 employee bulletins during collective dispute Information must be simple, truthful and sometimes hard-hitting Information must be simple, truthful and sometimes hard-hitting Timing is important Timing is important Prior to the ballot, trained Supervisors in content of Final Offer, explanation sessions during team meetings Prior to the ballot, trained Supervisors in content of Final Offer, explanation sessions during team meetings Informing line management is time consuming and needs pre-planning Informing line management is time consuming and needs pre-planning

8 Managing the Strike Keep site management up to date with information and key messages Keep site management up to date with information and key messages Regular strike preparation meetings, specific allocated responsibilities Regular strike preparation meetings, specific allocated responsibilities Worst-case scenario planning Worst-case scenario planning Communication call tree Communication call tree Keep lines of communication with TU open Keep lines of communication with TU open

9 Legal aspects Need good legal advice – know the law, case history, legal procedure, judges Need good legal advice – know the law, case history, legal procedure, judges Multiple inputs valuable Multiple inputs valuable Assume the TU knows the law well Assume the TU knows the law well Russian labour law confuses and frustrates head office management Russian labour law confuses and frustrates head office management

10 Settlement items In a ballot of employees on 1 Feb, a majority of employees voted to accept the Company’s Final Offer: 16-21% general pay increase 16-21% general pay increase Long Term Savings Plan Long Term Savings Plan Free meals Free meals Long Service Bonus Scheme Long Service Bonus Scheme Flexibility Allowance 10% Flexibility Allowance 10% New shift schedule New shift schedule Redundancy agreement Redundancy agreement Improved new vehicle discount Improved new vehicle discount