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FIRST ON CNBC: CNBC TRANSCRIPT: CNBC'S PHIL LEBEAU SITS DOWN WITH ALAN MULALLY, FORD MOTOR CEO, TODAY ON CNBC'S "POWER LUNCH"

WHEN: TODAY, WEDNESDAY, MAY 6TH

WHERE: CNBC'S "POWER LUNCH"

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

All references must be sourced to CNBC.

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HERERA: GOOD NEWS FROM MICHIGAN FOR A CHANGE FORD IS BUCKING THE TREND AND IS ANNOUNCING TO RE-OPEN A PLANT THAT IT CLOSED IN NOVEMBER TO BUILD SMALLER AND MORE FUEL-EFFICIENT CARS. PHIL LEBEAU JOINS US FROM WAYNE MICHIGAN WITH ANOTHER FIRST ON CNBC INTERVIEW.

LEBEAU: I'M JOINED BY FORD CEO ALAN MULALLY AT THE MICHIGAN ASSEMBLY PLANT.AT ONE POINT, THIS PLACE WAS A CASH COW FOR THE COMPANY AT ABOUT $3.5 BILLION A YEAR CRANKING OUTSUVs. NOW GOING TO TRY TO MAKE MORE MONEY BUILDING SMALL CARS HERE? EXPLAIN THIS PLAN TO ME.

MULALLY: ABSOLUTELY WELL IT'S AN EXCITING DAY. WE JUST FINISHED MEETING WITH OUR EMPLOYEES, THE GOVERNMENT LEADERS HERE.WE'RE SITTING IN THE MICHIGAN TRUCK PLANT WHERE WE USED TO MAKE SUVs AND WE'RE CONVERTING THIS PLANT OVER TO MAKING OUR NEW FORD FOCUS, OUR NEW MIXED GLOBAL PLATFORM IN THE SMALLER SIZED VEHICLES AND WE'RE SO EXCITED TO MAKE IT HERE AND START DELIVERING CARS IN THE END OF 2010.

LEBEAU: YOU KNOW THAT THE CYNICS ARE GOING TO SAY YOU CAN'T MAKE MONEY ON SMALL CARS EVEN WITH THE NEW UAW AGREEMENT, YOU CANNOT BE PROFITABLE BUILDING SMALL CARS IN THE U.S. HOW DO YOU PROVE THEM WRONG

MULALLY: IN THE BUSINESS MODEL PAST, THAT WAS TRUE BECAUSE WITH THE AGREEMENTS WE HAD, WITH THE FACT WE WERE REGIONAL OPERATIONS, NO SCALE. NOW, THE NEW FORD PLAN ON ALL OF OUR CARS BASED ON GLOBAL PLATFORMS SO WE GET THE SCALE, THE SUPPLIERS ARE LINED UP. WE GET THE VALUE OF THE PARTS BEING THE SAME, THE QUALITY, THE EFFICIENCY. AND HERE WITH OUR UAW AGREEMENT WE HAVE AN OPERATING AGREEMENT NOW WHERE WE CAN MAKE MONEY ON CARS IN THE US FOR THE FIRST TIME.

LEBEAU: NEW WORK RULES, LOWER WAGES ETC

MULALLY: LOOKS LIKE IT WE GOT THE HEALTH CARE IN THE VIVA AND WE ALSO GOT THE NEW WAGE RATES FOR THE EMPLOYEES --

LEBEAU: YOU GUYS ARE TAKING A MARKETSHARE AT A PRETTY RAPID CLIP HERE IF YOU TAKE A LOOK AT WHAT HAPPENED IN THE LAST FOUR MONTHS. TOTAL MARKET SHARE, JUST OVER 14% TO BEING JUST OVER 16%. IS TOYOTA IN YOUR SIGHTS?I KNOW YOU PASSED THEM UP.BUT ARE YOU SITTING THERE WITH THE EXECUTIVES SAYING LET'S CATCH TOYOTA?

MULALLY: WHAT WE'RE FOCUSED ON OF COURSE ARE THE CUSTOMERS OF FORD. AND WHEN WE STARTED THIS PLAN 2 1/2 YEARS AGO, WE DECIDED WE WOULD HAVE VEHICLES THAT THE CUSTOMERS WANT IN VALUE, SMALL, MEDIUM, LARGE, CAR, UTILITY, TRUCKS.WE PULLED TOGETHER TO MAKE THE NEW PLAN ON THE PRODUCT SIDE. WHAT WE'RE SEEING IN THE MARKET IS VERY GRATIFYING BECAUSE THE CONSUMERS LOVE THE NEW FORD PRODUCTS. EVERY NEW VEHICLE IS BEST IN CLASS, WORLDWIDE IN QUALITY, FUEL EFFICIENTCY AND SAFETY.IT REFLECTS THE NEW COMPLETE PRODUCT LINE AND THE QUALITY OF THAT PRODUCT LINE.

LEBEAU: ARE YOU WORRIED ABOUT CHRYSLER IN TERMS OF A STRIPPED DOWN CHRYSLER WITH THE COST STRIPPED OUT, THEY'RE GOING TO BE A TOUGH COMPETITOR FOR YOU. YOU NO LONGER HAS A BLOATED COMPETITOR ACROSS TOWN.IF THINGS WORK OUT, YOU'RE GOING TO HAVE SOMEBODY LEANER AND FAR MEANER, SO TO SPEAK.

MULALLY: OUR PLAN, PHIL, CLEARLY IS TO BE ONE OF THE LEADERS IN THE AUTOMOBILE INDUSTRY WORLDWIDE.WE HAVE TREMENDOUS ASSETS AROUND THE WORLD.WE'RE FOCUSED ON BEING THE LEADER AND ALSO COMPETING AGAINST THE VERY BEST COMPANIES IN THE WORLD.

LEBEAU: REAL QUICK, HAVE TO ASK YOU ABOUT THE ELECTRIC CAR.YOU'RE GOING TO BE BUILDING HERE COMING OUT IN 2011.THE ELECTRIC REVOLUTION DEPENDS ON HIGHER GAS PRICES. LET'S BE HONEST.PEOPLE WON'T BUY IT UNLESS GAS COMES TO A HIGHER PRICE.WOULD YOU LIKE TO SEE A GAS TAX IN THIS COUNTRY WHERE PEOPLE PAY $4, $5.

MULALLY: OUR POSITION ON THAT IS THAT WE'RE SUPPORTIVE OF AN INTEGRATED ENERGY POLICY.WE BELIEVE THE CONSUMER HAS TO BE INVOLVED. THAT'S ONE POSSIBLE WAY.BUT CLEARLY OVER TIME, THE DEMAND IS GOING TO BE AHEAD OF THE CAPACITY. SO WE BELIEVE OVER TIME THAT ENERGY AND COMMODITIES WILL CONTINUE TO INCREASE. WE'LL HAVE A FULL FAMILY AND EVERY YEAR IMPROVE OUR FUEL EFFICIENCY.

LEBEAU: WHAT WOULD YOU LIKE TO SEE WITH THE GAS TAX?

MULALLY: WELL GAS TAX IS ONE THING WE CAN DO.BUT WE NEED TO GET THE CONSUMER INVOLVED SO THE CONSUMER HAS A CHANCE TO MAKE AN ECONOMIC DECISION FOR SURE.

LEBEAU: ALAN MULALLY CEO OF FORD MOTOR COMPANY ON A BIG DAY FOR YOUR COMPANY. THIS STATE HAS LOST 700,000 SINCE THE YEAR 2000.YOU'RE COMMITTED TO KEEPING AT LEAST 3200 HERE IN THE STATE.





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