[SOUND] Ford Edge Advertisement: I like to live on the edge…[ANNOUCER] Introducing Edge, the all new Crossover from Ford. The Edge is never dull.”

JOHN HOCKENBERRY: Living on the edge. Edge is so ‘90s, but Ford's new product line is rolling out as the automaker is enjoying something of a dream moment. In the midst of a life or death crisis for General Motors and Chrysler and a near nationalization of those companies, Ford has been quietly going it alone. So far it has said it doesn't need Federal bailout money. But that doesn't mean Ford is absolutely in a happy place financially. Last year, Ford made its biggest ever annual loss, despite the sale of Jaguar and Land Rover. Now, it’s in talks to sell off its Swedish subsidiary, Volvo. Joining us now is Alan Mulally. He’s CEO of the Ford Motor Company. He joins me now from Ford headquarters in Dearborn, Michigan. Mister Mulally, thanks so much for being with us.

ALAN MULALLY: You’re welcome. Good morning to you, John.

JOHN HOCKENBERRY: My first question to you is that a lot has been made of the fact that Ford’s dodging the bullet here is not so much a matter of management, as it is a matter of timing. In the fact that you had a reversal of fortunes about two and a half years ago and arranged a credit line that has really been beneficial right now. Is it a more a matter of timing or more a matter of management savvy that’s really gotten you to this point?

ALAN MULALLY: [Laughs] That’s a tough question. I clearly think that the financing is the important part of our business plan, but John, I go back to is the fundamental point of view that the Ford Motor Company has taken about the future going forward, and the actions that we have taken to create that future. Two and a half years ago we decided that fuel efficiency was going to be very, very important to all of us going forward, along with quality and safety and good value. We also decided that we wanted to provide the customers with an absolutely clear vision of Ford and focus on the Ford brand. As you mentioned, we divested Aston Martin, Jaguar and Land Rover and bought down our relationship in Mazda, and, of course as you mentioned, we’re looking at the next steps with Volvo. So, the other thing we decided was that we were going to be in every market segment that customers wanted us in – small, medium, or large cars, utilities or trucks. And, we decided that every new vehicle that you got from Ford would be best in class and quality, fuel efficiency, safety, and value and we have made tremendous progress on all four, five of those elements. And of course the piece that you mentioned is that we knew that the economy was going to slow down, we wanted to continue this transformation during the worst of times and so we took on some extra debt and we have sufficient liquidity to make it through this and be there with the products that people do really want.

JOHN HOCKENBERRY: Well 41% decline in sales is the last reported number, so demand is going to have to pick up for you to avoid some of the similar difficulties that your colleagues at General Motors and Chrysler are experiencing in a very painful way right now. Last night, your colleague, executive chairman William Ford told National Public Radio that the most positive news on the statistic front for Ford is the growing market share. That sounds like me you might be happy to see Chrysler go away or a much smaller General Motors. Is that true?

ALAN MULALLY: Well, the most important thing is that we have and continue to produce the vehicles that people really do want. And, we have really appreciated the fact that the customers really love the new line up and we have increased market share over the last few months and quarters, which is terrific.

JOHN HOCKENBERRY: But it’s also conceivably a euphemism for it’d be great if there was no more Chrysler, do you believe that?

ALAN MULALLY: Well, we don’t have a point of view about the competition. Clearly the auto industry worldwide is very competitive and Ford is very well position, not only in the United States, but also in South America, Canada, Europe, and Asia Pacific. So, another part of our plan has been to leverage these fabulous Ford vehicles around the world, whether they’re small, medium or large, and bring that scale and that quality to all the markets around the world. So, we feel like we’re on a really good track.

JOHN HOCKENBERRY: Although I’m gonna try this one more time, and then we’ve got listener questions for you. I mean conceivably, if Chrysler goes away and General Motors shrinks, it could look a lot more like Boeing, where you used to be an executive, where there’s no competition in the United States for commercial aircraft, you could be in a much less competitive situation here in the United States, if those companies go away. That would be a good thing. Be familiar to you.

ALAN MULALLY: It would be clearly, you know competitiveness is absolutely the key in business and I feel very good about the actions that Ford has taken to continuously improve their competitiveness.

JOHN HOCKENBERRY: All right. One of our listeners East Chester, New York has a question for you, Alan Mulally.

The Takeaway Listener: ”This is Mitch Weaver from East Chester, New York I'd like to ask Allen Mullaly if he thinks it's possible to implement the gas tax that could support the sales of smaller more efficient cars? ”

JOHN HOCKENBERRY: You know, many in Washington have talked about this, a gas tax would help demand. Do you agree?

ALAN MULALLY: Well, clearly, getting the consumer involved in energy independence, energy security, sustainability is absolutely key no matter how we come out on our energy policy going forward. You can really see what happened as the fuel crisis went up over this last year and the consumers moved to a more balanced portfolio of small, medium and large vehicles, so, clearly I think it’s important one way or the other, gas tax is one way. But, clearly that we get the consumer involved. I might point out in Europe and many of the other areas around the world where they’ve had an integrated energy policy where the consumer has been paying the real cost of energy that the average size of vehicles are smaller so I just think it’s really important that we get the consumer involved in the policy as we go forward.

JOHN HOCKENBERRY: But does the demand for hybrids and fuel efficiency cars need a push in your view?

ALAN MULALLY: Well, absolutely because it’s a value proposition. We make an economic decision when we purchase a car and the technology that we put into a hybrid costs more, but it also delivers better fuel efficiency and so there’s an economic case to be made and clearly the more the fuel costs, the more beneficial hybrids and the electric vehicles will be.

JOHN HOCKENBERRY: Alright. Quickly. Here’s a listener named Samuel with a very specific problem related to hybrids.

The Takeaway Listener: “I recently bought a 2008 Mercury Mariner Hybrid, but there were so few available I had to wait for absolute weeks. Why aren’t they making more of these hybrids? So that people could buy them and so the company could take advantage of a product that is timely.”

JOHN HOCKENBERRY: CEO Mulally?

ALAN MULALLY: Samuel has a really good question because when we first introduced the Escape and Mariner Hybrid we were very pleasantly surprised the demand we had for those vehicles. They are a small utility so they have all the advantage of a car but all the wonderful versatility of an SUV. Great size, great fuel efficiency, so we have now increased our production on those as well as the new Escape.

JOHN HOCKENBERRY: I’m gonna jump in here. I’m talking with Allan Mulally, CEO of the Ford Motor Company. We’re talking about the infrastructure required for the new kinds of efficient vehicles.

[INTERSITITAL]

FEMI OKE: This is TheTakeaway, I’m Femi Oke.

JOHN HOCKENBERRY: And I’m John Hockenberry. With me now is Alan Mulally, CEO of the Ford motor company. On the line from Dearborn. Finish your thought about what Samuel was saying. It seems like there’s an infrastructure that’s required to support these new hybrid vehicles and that’s ramping up and has to ramp up over the next few years.

ALAN MULALLY: Oh sure. I think Samuel’s question, John, really was about the availability, about being able to get the hybrid that he wanted. And he’s absolutely right. When we first introduced the SUV, small utility hybrid. It was such a success in the marketplace. And we have been gearing up our production even more rapidly to satisfy that demand. And, we really see that now with the new Escape hybrid. And also the Fusion hybrid, which gets 41 mpg, 8 mpg better than a Toyota Camry. So, we really learned from Samuel’s question and we are going to have the vehicles that people want, in the quantity they want them.

The Takeaway Listener: My name is Anthony Ombrocio. I live in Grosse Point. Michigan, just one block outside of Detroit. I wonder what the auto manufacturers can do about the people who sell and service their cars because it's been my experience that even when an American manufacturer makes a superior product, the problem comes in with the people who sell the car and then are supposed to service it. They treat you like dirt.

JOHN HOCKENBERRY: A problem of branding and customer service there. How are you dealing with that?

ALAN MULALLY: Well, Anthony makes a really good point. And, if you look a little deeper into Anthony’s question. One of the issues is that we ended up, si that we endued up with too many dealers, especially in large metropolitan areas. So, the most important thing that we’re doing with the dealers, in partnership with them, is to get the dealers the size of the number of dealers around the U.S. right-sized. That means they’ll get their throughput up. Their profitability up. They’ll continue to invest more in their store and their whole attitude and way the approach the marketplace will improve dramatically. But, I’m with Anthony, that I think with the Ford brand now and also the quality of our vehicles and the excitement the dealers have and especially as they become more successful as we get them right-sized, I think they everybody’s going to have a whole different feeling and experience with Ford going forward that they will really appreciate.

The Takeaway Listener: “Good morning Troy calling from North Dakota. Question for Alan Mulally: Individual production designs aside— how can American auto manufacturers innovate their processes or upgrade their facilities to close the production gap and come up to speed to foreign base competitors whose North American plans consistently out perform us.”

JOHN HOCKENBERRY: Alan Mulally?

ALAN MULALLY: Well absolutely. I’m glad you asked that question. That’s a great ending question. That has been our number one goal. Is that we are best in class with every new vehicle when it comes to quality, fuel efficiency, safety and value, which means productivity. And, I’m really pleased to be able to share with everybody that with the agreements we’ve made with the UAW, it’s a transformational agreement on our cost structure, plus what we’ve done on our plants with quality and productivity, we are equal to or better than the best auto companies in the world when it comes to our quality and our productivity. But also, so important for all of us, that means we can make the finest cars in the world, small, medium and large, in the US and do it profitably. So we’re going to provide a lot of opportunities and a lot of excitement for a so many people going forward.

JOHN HOCKENBERRY: Alan Mulally, CEO of the Ford Motor Company. Thanks so much for joining us.

ALAN MULALLY: Thank you, John. Drive a Ford.