CNBC Press Releases

AP Alan Mulally

WHEN: TODAY, FRIDAY, APRIL 24TH AT 12:10PM ET

WHERE: CNBC'S "POWER LUNCH"

Following is an unofficial transcript of a FIRST ON CNBC interview with Ford Motor Company CEO Alan Mulally today on CNBC's "Power Lunch."

All references must be sourced to CNBC.

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LEBEAU: HI SUE AND I AM HERE WITH FORD MOTOR CEO ALAN MULALLY ON A BIG DAY FOR YOU GUYS ALAN THE STOCK IS RALLYING LARGELY BECAUSE YOU GUYS DELIVERED FAR BETTER RESULTS THAN EXPECTED A LOSS OF 1.9 BILLION DOLLARS SEVENTY-FIVE CENTS A SHARE AND THAT'S PRE-TAX EXCLUDING CHARGES REVENUE ABOUT 2 BILLION DOLLARS BETTER THAN EXPECTED AND A CASH DRAIN OF JUST 3.7 BILLION WHICH I KNOW IS A LOT BUT PEOPLE AT HOME NEED TO PUT IN PERSPECTIVE WHERE YOU GUYS WERE AT AND WHERE YOU GUYS ARE GOING

MULALLY: WELL YOU KNOW JUST ON THE CASH BURN ISSUE IT'S JUST SO IMPORTANT TO US CONTINUING OUR TRANSFORMATIONAL PLAN THAT CASH BURN IS LESS THAN 50% OF WHAT WE HAD IN THE THIRD QUARTER AND THE FOURTH QUARTER CAUSE WE'VE BEEN MANAGED NOT ONLY THE PROFITABILITY BUT ALSO ALL OF OUR NET ASSETS AND OUR WORKING CAPITALS SO THAT'S AND WE ALSO COMMITTED TODAY THAT WE BELIEVE THAT WE CAN REDUCE THAT CASH BURN EVERY QUARTER THROUGHOUT THE REST OF THIS YEAR

LEBEAU: YOU LOOK AT THIS CASH BURN YOU TOLD ME THIS MORNING THAT WE BELIEVE THAT WE ARE TURNING THE TIDE IN NORTH AMERICA THIRD QUARTER YOU ARE BURNING THROUGH ROUGHLY 80 MILLION A DAY DOWN TO 59 MILLION IN THE FOURTH QUARTER THIS MOST RECENT QUARTER YOU ARE GOING THROUGH 41.1 MILLION PER DAY WHEN YOU SAY WE SEE THE TIDE TURNING IN NORTH AMERICA THERE ARE SOME PEOPLE SAY YOU ARE STILL USING 41 MILLION DOLLARS A DAY THIS COMPANY STILL HAS A LOT OF PROBLEMS

MULALLY: WELL I SURE UNDERSTAND THAT COMMENT BUT I THINK WHAT WE ARE GOING TO DO IS BACK UP TO WHERE WE HAD BEEN AND WHERE WE ARE GOING AND WE ALSO VALIDATED TODAY OUR GUIDANCE THAT WE ARE ON TRACK TO GET BACK THE PROFITABILITY BY 2011 THE MOST IMPORTANT THING ABOUT TODAY IS THE IMPROVEMENT WE MADE IN THE FIRST QUARTER OF THIS YEAR OVER THE FOURTH QUARTER OF LAST YEAR AND THAT'S SUBSTANTIAL IMPROVEMENT THAT PUTS US ON A GLIDE SLOPE THAT GETS BACK TO PROFITABILITY

LEBEAU: BY 2011

MULALLY: YES

LEBEAU: LET ME ASK YOU ABOUT WHAT'S HAPPENING WITH CHRYSLER AND GENERAL MOTORS THERE IS THE POSSIBILITY BY THE END OF NEXT WEEK THAT WE SEE CHRYSLER FILE FOR CHAPTER 11 BANKRUPTCY GM COULD BE THERE WITHIN A MONTH IF THEY GO INTO BANKRUPTCY HOW DOES THAT IMPACT FORD

MULALLY: WELL THAT'S A VERY IMPORTANT QUESTION PHIL AND THE PRESIDENT AND THE AUTOMOTIVE TASK FORCE HAVE PUT THE AUTOMOBILE INDUSTRY AND HAVING A VIABLE INDUSTRY AS A TOP OF THEIR AGENDA ON THE ECONOMIC RECOVERY AND THEY KNOW WE ARE VERY CONFIDENT THAT THEY UNDERSTAND THAT THE SUPPLY BASE IS THE MOST IMPORTANT BECAUSE ITS THE MOST FRAGILE THEY SUPPORT ALL OF US NOT ONLY GM CHRYSLER AND FORD ALSO TOYOTA AND HONDA AND THE REST OF THE COMPANIES SO THEY PUT VEHICLES IN PLACE TO MANAGE AND BACKSTOP THE SUPPLIERS AND I THINK THAT THEY WILL CONTINUE TO TAKE ACTION AND MAKE SURE THAT SUPPLY BASE STAYS HEALTHY AS WE GO THROUGH THIS RESTRUCTURING

LEBEAU: BUT IF THEY CAN CUT THEIR IF GM AND CHRYSLER CAN CUT THEIR COSTS DOWN TO THE BONE IS IT POSSIBLE THAT YOU'RE GOING TO SIT THERE AND SAY WAIT A SECOND WE NEED TO PERHAPS ASK THE GOVERNMENT FOR MONEY BECAUSE WE NEED TO CUT OUR COSTS DOWN FURTHER

MULALLY: I THINK WE'RE CLEARLY IN A DIFFERENT PLACE PHIL WE STARTED THIS RESTRUCTURING 21/2 YEARS AGO WE DIVESTED ALL OF THE OTHER BRANDS AND ALL THE COMPLEXITY WE HAVE A LASER FOCUS ON FORD WE HAVE A COMPLETE PRODUCT LINE SMALL MEDIUM AND LARGE CARS UTILITIES AND TRUCKS BEST IN CLASS IN FUEL EFFICIENCY AND QUALITY AND SAFETY SO WE HAVE TAKEN THE TOUGH STRUCTURAL ACTIONS WE HAVE A GOOD AGREEMENT WITH UAW WE'RE COMPETITIVE WITH OUR OFFERING AGREEMENTS SO WE ARE WELL DOWN THAT RESTRUCTURING ROUTE AND WE HAVE THE MONEY TO CONTINUE THIS TRANSFORMATION

LEBEAU: YOU HAVE TALKED WITH THE TASK FORCE IN THE PAST YOU HAVE BEEN TO WASHINGTON TO TALK TO THEM HOW OFTEN ARE YOU TALKING TO THEM AND WHEN YOU ARE TALKING WITH THEM HAVE YOU TOLD THEM YOUR CONCERNS ABOUT THE SUPPLIERS AND WHETHER OR NOT THEY SURVIVE

MULALLY: YES WE HAVE A CONTINUING DIALOGUE GOING WITH THEM AND THEY USE US AND OUR EXPERIENCE WHERE WE ARE IN THE INDUSTRY AND I AM ABSOLUTELY CONFIDENT PHIL THAT THEY UNDERSTAND THE MOST IMPORTANT PART THAT WE RESTRUCTURE AND WE DO IT CAREFULLY AND KEEP THEM VIABLE AS WE CONSOLIDATE PART OF THE SUPPLY BASE

LEBEAU: IS THE WORST OVER FOR FORD

MULALLY: WELL WE THINK A LOT ABOUT THAT AGAINST THE ECONOMY BECAUSE CLEARLY THIS IS A VERY TOUGH ENVIRONMENT THE INDUSTRY IS DOWN WE KNEW IT WAS GOING TO BE DOWN THE FIRST TWO QUARTERS OF THIS YEAR IT'S ABOUT WHERE WE THOUGHT IT WAS GOING TO BE WE BELIEVE THAT WITH THE BANKS STABILIZING AND THE CREDIT FREEING UP PLUS ALL THE FISCAL AND MONETARY STIMULUS THAT WE'LL START TO COME BACK THE THIRD AND FOURTH QUARTER AND WE ARE GOING TO BE THERE WITH A VERY LEAN FORD MOTOR COMPANY WITH THE PRODUCTS THAT PEOPLE REALLY DO WANT

LEBEAU: YOU ARE INCREASING PRODUCTION IN THE US BY 25% IN THE SECOND QUARTER AND YOU BELIEVE WE'VE PROBABLY SEEN THE BOTTOM SO FROM YOUR PERSPECTIVE THIS IS WHERE YOU START TO SEE THE UPSLOPE

MULALLY: WELL ONE OF THE REASONS WE ARE ABLE TO DO THAT IS WE TOOK DECISIVE ACTION IN THE SECOND HALF OF LAST YEAR TO REDUCE OUR PRODUCTION TO THE REAL LOWER DEMAND BECAUSE WE ARE ABLE TO GET THE INVENTORY DOWN THE DEALER STOCKS DOWN KEEP THE RESIDUAL VALUES UP SO THE FACT THAT WE TOOK THAT AGGRESSIVE STANCE NOW WE GET A CHANCE TO MOVE UP A LITTLE BIT TO SUPPORT THE INCREASED DEMAND ON THE STRENGTH OF OUR NEW PRODUCT LINE

LEBEAU: THERE ARE GOING TO BE SOME PEOPLE WHO LOOK AT WHAT HAPPENED TO FORD MOTOR STOCK WHICH HAS GONE FROM A LOW OF JUST OVER A DOLLAR A DOLLAR AND ONE CENT FEBRUARY INTO NOVEMBER AND NOW ITS TRADING OVER 5 DOLLARS A SHARE AND I'M ALREADY HEARING PEOPLE ON WALL STREET SAYING THAT FORD IS IN BETTER SHAPE BUT LETS NOT JUMP ON THE BANDWAGON TOO MUCH HERE BECAUSE THEY ARE NOT OUT OF THE WOODS YET

MULALLY: WE'RE CLEARLY ON A VERY GOOD PROGRESS A TREMENDOUS PROGRESS IN THE FIRST QUARTER YEAR OVER YEAR ITS GOOD OVER THE LAST QUARTER IS GOOD WE HAVE A LONG WAY TO GO BUT WE HAVE A LOT OF CONFIDENCE BASED ON THIS PERFORMANCE OVER THE LAST FEW QUARTERS AND THE LAST YEAR THAT THE PLAN IS THE RIGHT PLAN AND IT MEANS THAT WE HAVE TO RESTRUCTURE OURSELVES WE'RE ALSO GOING TO KEEP INVESTING IN NEW PRODUCT SO WE ARE VERY CONFIDENT FOR THE LONG TERMS THAT WE ARE GOING TO CREATE A PROFITABLY GROWING FORD FOR ALL OF US

LEBEAU: ANY CHANCE YOU CAN BE PROFITABLE BEFORE 2011

MULALLY: WELL A LOT OF THINGS CAN CHANGE BUT CLEARLY THERE ARE THINGS UNDER OUR CONTROL THAT WE ARE TAKING AGGRESSIVE ACTION ON THERE ARE A LOT OF THINGS OUTSIDE OUR CONTROL BUT RIGHT NOW OUR BEST GUIDANCE IS THAT WE ARE ON A REALLY GOOD PLAN TO GET BACK TO PROFITABILITY IN 2011

LEBEAU: ALAN MULALLY CEO FORD MOTOR COMPANY ON A DAY SUE WHEN HIS COMPANY REPORTING BETTER THAN EXPECTED RESULTS IN THE FIRST QUARTER.


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