Industry risk report auto manufacturing

Risk & Insurance, May, 2005

INDUSTRY RISK REPORT AUTO MANUFACTURING

There's more to making a car than conveyor belts and assembly lines,
just ask people like Ford Motor Company's Laurie Champion. Find out
what risk managers in the auto manufacturing industry are doing to
drive up production levels and stay up to speed with fluctuating
markets.

Company Name                    Location

Arvinmeritor Inc.               Troy, Mich

Dana Corp.                      Toledo, Ohio

Delphi Corp.                    Troy, Mich.

Ford Motor Co.                  Dearborn, Mich

General Motors Corp.            Detroit, Mich.

Johnson Controls Inc.           Milwaukee, Wis.

Lear Corp.                      Southfield, Mich.

Paccar                          Bellevue, Wash.

The Goodyear Tire and Rubber    Akron, Ohio
Co.
Visteon Corp.                   Dearborn, Mich.

Company Name                    CRO

Arvinmeritor Inc.               David Lacey, Director, Risk
                                and Insurance

Dana Corp.                      Dennis Bennice, President,
                                Dana Risk Management
                                Services, Inc.

Delphi Corp.                    Pamela Geller, Treasurer

Ford Motor Co.                  Laurie Champion, Director,
                                Global Risk Management

General Motors Corp.            R. Paul Maddock, General
                                Director, Risk Management

Johnson Controls Inc.           John Vargo, Director,
                                Corporate Risk Management

Lear Corp.                      Barbara Boroughf,
                                Worldwide Director, Health,
                                Safety and Workers' Comp

Paccar                          Rebecca McQuade, Director
                                of Risk Management

The Goodyear Tire and Rubber    Damon Audia, Assistant
Co.                             Treasurer, Capital Markets

Visteon Corp.                   Peter Look, VP and Treasurer

Company Name                    CFO

Arvinmeritor Inc.               Rakesh Sachdev (acting
                                CFO)

Dana Corp.                      Robert C. Richter

Delphi Corp.                    John D. Sheehan

Ford Motor Co.                  Donat R. Leclair

General Motors Corp.            John M. Devine

Johnson Controls Inc.           Stephen A. Roell

Lear Corp.                      David C. Wajsgras

Paccar                          None

The Goodyear Tire and Rubber    Richard J. Kramer
Co.

Visteon Corp.                   James F. Palmer

                                2004 Total           No. of
Company Name                    Revnue               Employees

Arvinmeritor Inc.               $7.7 billion         32,000

Dana Corp.                      $7.9 billion         59,000

Delphi Corp.                    $28.0 billio         190,000

Ford Motor Co.                  $164.1 billion       327,531

General Motors Corp.            $185.5 billion       326,000

Johnson Controls Inc.           $22.6 billion        118,000

Lear Corp.                      $15.7 billion        111,000

Paccar                          $8.1 billion         16,100

The Goodyear Tire and Rubber    $15.1 billion        86,000
Co.

Visteon Corp.                   $17.6 billion        72,000

                                Primary
Company Name                    Broker               Captives

Arvinmeritor Inc.               Withheld             No

Dana Corp.                      Withheld             No

Delphi Corp.                    Marsh                Delphi Ltd.
                                                     (Ireland)

Ford Motor Co.                  Willis, Marsh        FCE Reinsu-
                                                     rance Co. Ltd.
                                                     (Ireland);
                                                     Transcon In-
                                                     surance Ltd.
                                                     (Bermuda)

General Motors Corp.            Mars                 Cap Re of
                                                     Vermont Inc.
                                                     (Vermont)

Johnson Controls Inc.           Withheld             No

Lear Corp.                      Withheld             No

Paccar                          Aon                  Paccar In-
                                                     surance Co.
                                                     Ltd. (Bermuda)

The Goodyear Tire and Rubber    Quest                Wingfoot In-
Co.                                                  surance Co.
                                                     Ltd. (Bermuda)

Visteon Corp.                   Withheld             No

Company Name:           Risk Exposure:

Arvinmeritor Inc.       Risks related to foreign currency fluctu-
                        ations; international political and eco-
                        nomic situations; disruptions to trading
                        markets, both domestic and abroad; labor
                        disruptions; the demand for commercial
                        specialty and light vehicles; successful
                        integration of acquired or merged compa-
                        nies; credit ratings and the company's
                        debt; pending litigation related to as-
                        bestos and the environment.

Dana Corp.              Economic conditions in national and inter-
                        national markets; adverse market effects
                        of terrorism or hostilities; strength of
                        other currencies in relation to the U.S.
                        dollar; ability of Dana's customers and
                        suppliers to achieve their projected sales
                        and production levels; increases in pro-
                        duction and materials costs (especially
                        steel).

Delphi Corp.            The company's ability to achieve the labor
                        benefits expected after the separation
                        from GM; the company's ability to generate
                        sufficient excess cash flow to meet incre-
                        ased pension funding obligations; poten-
                        tial increases in warranty costs; currency
                        exchange fluctuations in the markets in
                        which the company operates; downturns in
                        the vehicle production rate in North
                        America.

Ford Motor Co.          Price competition resulting from currency
                        fluctuations and industry overcapacity;
                        work stoppages and other interruptions of
                        supply at Ford or any key suppliers; the
                        discovery of defects in vehicles resulting
                        in delays of new models and recall cam-
                        paigns; unusual or significant litigation
                        or government investigations into alleged
                        defects in vehicles; a further credit
                        rating downgrade; the increased cost of
                        fuel.

General Motors Corp.    Changes in economic conditions, currency
                        exchange rates and political instability;
                        labor strikes or work stoppages; shortages
                        of or price increases for fuel; changes in
                        laws, regulations or tax rates; the ability
                        of the company to achieve reductions of
                        cost and employement levels.

Johnson Controls Inc.   Industry vehicle production levels; U.S.
                        dollar exchange rates; the company's long-
                        term debt; the company's ability to succe-
                        ssfully complete and integrate various
                        mergers and acquisitions.

Lear Corp.              Fluctuations in the production of vehicles
                        for which the company is a supplier; labor
                        disputes involving Lear or significant
                        customers; costs associated with facility
                        closures; raw material costs and availa-
                        bility; adverse changes in economic or
                        political instability in jurisdictions in
                        which the company operates.

Paccar                  A significant decline in industry sales;
                        competitive pressures; reduced market
                        share; reduced availability or higher
                        prices for fuel; currency or commodity
                        price fluctuations; supplier interrup-
                        tions; increased warranty costs or
                        litigation; legislative or government
                        regulations.

The Goodyear Tire       Completion of implementation of a plan for
and Rubber Co.          improved internal controls within the
                        company; pending litigation regarding the
                        company's reinstatement that could have an
                        adverse affect on future transactions;
                        significant global competition, especially
                        from low-cost manufacturers; higher raw
                        material and energy costs that will adver-
                        sely affect the company's expenditures in
                        the future.

Visteon Corp.           Visteon's dependence on Ford Motor Co.; the
                        company's obligation to satisfy its pension
                        and post-retirement plans; changes in ve-
                        hicle production volume in markets where
                        we operate; restrictions in labor contracts
                        with unions; changes to the markets in
                        which Visteon operates and obtains materials
                        and supplies; product liability, warranties
                        and safety claims.

Company Name:           Risk Strategies:

Arvinmeritor Inc.       The company enters into interest rate swap
                        agreements to hedge interest rate risks in
                        the market. The company also uses other
                        financial derivatives such as foreign
                        currency forward contracts to hedge foreign
                        currency and other market risks.

Dana Corp.              The company uses foreign exchange contracts
                        to hedge currency fluctuation risks; the
                        company also uses interest rate swap
                        agreements as hedges.

Delphi Corp.            Delphi enters into various forward cont-
                        racts, options and swaps with several
                        counterparties to manage its exposure to
                        fluctuations in foreign currency, interest
                        rates and certain commodity prices; the

Ford Motor Co.          The company maintains programs providing
                        for post-retirement benefits and life
                        insurance for its employees.

General Motors Corp.    The company uses a risk management control
                        system to monitor foreign exchange, inte-
                        rest rate, commodity and equity price
                        risks and related hedge positions. The
                        company also engages in foreign exchange
                        forward contracts and interest rate swaps
                        to hedge market risks.

Johnson Controls Inc.   The company accrues for potential enviro-
                        nmental losses consistent with generally
                        accepted accounting principles; it also
                        holds reserves of approximately $62 million
                        for environmental losses and costs. The
                        company also uses financial derivatives to
                        reduce market risk associated with fluc-
                        tuating interest rates and foreign curr-
                        ency levels.

Lear Corp.              Lear uses foreign exchange contracts to
                        mitigate foreign currency risk (especially
                        that associated with the Mexican peso). The
                        company also uses a combination of fixed
                        and variable rate debt and interest rate
                        swap contracts to manage exposure to
                        interest rate movements. Approximately 20
                        percent of the company's workforce is
                        covered by the company's benefits post-
                        retirement plan.

Paccar                  Derivative financial agreements are used
                        as hedges to manage exposures to fluctua-
                        tions in interest rates and foreign
                        currency exchange rates.

The Goodyear Tire       The company maintains insurance coverage
and Rubber Co.          and excess liability insurance for expo-
                        sures related to asbestos, as well as
                        maintaining workers compensation and
                        benefits programs.

Visteon Corp.           The company sponsors various pension,
                        health care and life insurance plans for
                        its employees.