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CNBC EXCLUSIVE: CNBC TRANSCRIPT: CNBC'S PHIL LeBEAU SPEAKS WITH ALAN MULALLY, FORD MOTOR CEO, TODAY ON "THE CALL"

WHEN: Today, Wednesday, September 29th at 11:15am ET

WHERE: CNBC's "The Call"

Following is an unofficial transcript of a CNBC EXCLUSIVE interview with Ford Motor CEO Alan Mulally today on CNBC's "The Call" at 11:15am ET.

All references must be sourced to CNBC.

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LeBEAU: HI, MANDY. WE ARE BACKSTAGE AHEAD OF THE PARIS AUTO SHOW AT FORD'S EVENT WHERE THEY'RE GOING TO BE INTRODUCING THE NEW FOCUS ST. WHICH WILL HIT MARKETS IN 2010 AND BACKSTAGE WITH ME IS FORD CEO ALAN MULALLY. HOW IMPORTANT IS IT FOR YOU AT A GLOBAL SHOW LIKE THIS THAT YOU CONTINUE TO PUSH THE MESSAGE, THE NEW PRODUCTS KEEP COMING? PEOPLE ARE LOOKING AT THE MARKETS AND ARE A LITTLE WORRIED.

MULALLY: WELL THIS IS A FANTASTIC OPPORTUNITY. RIGHT BEHIND US, EVERYBODY'S GOING TO GET A CHANCE TO SEE THE NEW FOCUS ST. GOING TO BE TEN DIFFERENT PLATFORM-- TEN DIFFERENT VEHICLES OFF OF THIS PLATFORM, OVER 2 MILLION VEHICLES WORLDWIDE WITH 80% OF THE PARTS BEING THE SAME. THIS IS A REAL PROOF POINT FOR THE MAGIC OF THE NEW FORD.

LeBEAU: YOU MENTIONED THE ST. LET'S GO OVER HERE. BOB, OUR PHOTOGRAPHER, IS GOING TO WALK IN AND GIVE EVERYBODY SOME PERSPECTIVE ON THE ST. THIS IS THE FIRST HIGH-PERFORMANCE EDITION THAT'S BEEN OKAYED AND WILL BE BUILT OFF OF YOUR GLOBAL VISION SO TO SPEAK. YOU TALK ABOUT THE 2 MILLION VEHICLES. THIS IS REALLY WHAT WE ARE TALKING ABOUT IN TERMS OF LEVERAGING THE LOWER COSTS, CORRECT?

MULALLY: ABSOLUTELY, PHIL. ON THIS VEHICLE ITSELF, WHAT EVERYBODY'S GOING TO SEE FIRST, A FOUR-DOOR, FIVE-DOOR, HATCHBACK AND THE SPECIAL PERFORMANCE ONE. BUT YOU CAN IMAGINE THE INTELLECTUAL KNOWLEDGE WE'VE BEEN ABLE TO BRING AROUND THE WORLD. ALSO THIS IS GOING TO BE MADE IN FIVE DIFFERENT LOCATIONS AND OUR ASSEMBLY PLANT IN WAYNE IS ALSO GOING TO PRODUCE THIS. SO THIS IS GOING TO BE A TERRIFIC, TERRIFIC PRODUCT FOR THE CUSTOMERS.

LeBEAU: LET ME ASK YOU ABOUT WHERE THE MARKET IS IN TERMS OF AUTO SALES. EARLIER THIS YEAR, LATE LAST YEAR YOU STARTED RAMPING UP PRODUCTION IN ANTICIPATION THAT THIS YEAR WE WOULD SEE SALES CONTINUE TO GROW IN THE SECOND HALF OF THIS YEAR.THEY'RE NOT. THEY'RE PLATEAUING IN THAT 11.5 MILLION RANGE. IS IT TIME TO BE A LITTLE WORRIED ABOUT WHERE THE PRODUCTION LEVELS ARE NOT ONLY AT FORD BUT FOR THE INDUSTRY?

MULALLY: I THINK IT REALLY GOES WITH THE ECONOMY DEVELOPMENT. AND AS WE ALL KNOW, THIS IS THE SLOWEST RECOVERY FROM A RECESSION THAT WE'VE EVER HAD. CLEARLY FROM ONE OF THE WORST RECESSIONS WE'VE EVER HAD -- IT'S STILL IMPROVING. THE FUNDAMENTALS ARE IMPROVING.SEPTEMBER LOOKS REALLY GOOD. WE'LL HAVE YEAR-OVER-YEAR IMPROVEMENT OVER LAST YEAR CLEARLY. BUT RIGHT NOW ALL THE FUNDAMENTALS SAY THAT OUR GROWTH IS GOING TO CONTINUE ALTHOUGH IT IS SLOWER THAN IT HAS BEEN ON PAST RECESSIONS.

LeBEAU: WHAT DOES THE RESEARCH TELL YOU IN TERMS OF WHY PEOPLE ARE HESITANT TO CONTINUE COMING INTO THE SHOWROOMS? CLEARLY THERE'S THAT BASE DEMAND, BUT WHY AREN'T WE SEEING THAT NEXT LEVEL? IS IT ALL CONSUMER CONFIDENCE RIGHT NOW?

MULALLY: WELL I THINK THAT'S A MAJOR PART OF IT. WHEN YOU LOOK AT OUR UNEMPLOYMENT AND OUR TRADE DEFICIT AND OUR BUDGET DEFICIT AND ALL THE FISCAL AND MONETARY POLICY WE ARE BRINGING TO GET THIS RECOVERY GOING. I THINK THAT AS WE START TO SEE THE RECOVERY HAPPEN THAT CONSUMER CONFIDENCE IS GOING TO ALLOW EVERYBODY MAKE THESE DECISIONS AGAIN.

LeBEAU:: WHEN DO YOU LOOK INTO THE FUTURE AND SAY THIS WHEN WE START TO SEE DEMAND PICK UP? OR CAN YOU NOT EVEN PREDICT IT RIGHT NOW GIVEN WHERE THE ECONOMY IS IN THE US?

MULALLY: WE CLEARLY BELIEVE IT IS GOING TO RECOVER. IT IS GOING TO BE SLOWER THEN IT HAS IN THE PAST, BUT THE MOST IMPORTANT THING IS WE HAVE RESTRUCTURED OURSELVES TO OPERATE AT THIS LOWER DEMAND AND OPERATE PROFITABLY.AT THE SAME TIME, WE HAVE BEEN ACCELERATING THE INVESTMENT ON ALL THESE NEW PRODUCTS TO BE PART OF THE ANSWER AND BE PART OF THIS RECOVERY.

LeBEAU: YOU CAN'T SEE INTO YOUR FUTURE AT SOME POINT WHERE YOU THINK IT'S THE FIRST QUARTER THAT WE START SO SEE IT GET CLOSE TO A 12-MILLION-UNIT DEMAND?

MULALLY: NO, THE BEST INTELLIGENCE WE HAVE TODAY FOR THE YEAR OF 2010 WILL BE BETWEEN 11.5 AND 12 AND THEN RECOVERING AFTER THAT IN 2011.

LeBEAU: I WANT TO TALK ABOUT WHAT WE SEE WITH THE ST, THE NEW FOCUS, AND CLEARLY YOU'RE ALREADY SEEING IT WITH THE FIESTA.

MULALLY: YES.

LeBEAU: PEOPLE ARE PERHAPS NOT REACHING FOR THAT NEXT LEVEL OF VEHICLE ON THE PRICE POINT. THEY'RE STAYING WITH THE LOWER PRICE POINT VEHICLE BUT THEY'RE ADDING THOUSANDS IN CONTENT. HOW DO YOU EXPLAIN THIS, AT A TIME WHEN PEOPLE WANT TO BE A LITTLE MORE PRUDENT, THEY ARE DEMANDING TO HAVE THE EXTRA FEATURES EVEN IF IT MEANS TAKING THE BASE PRICE UP A COUPLE THOUSAND?

MULALLY: THIS IS AN IMPORTANT QUESTION.WHAT WE'RE SEEING IS THAT WHEN WE DECIDED TO HAVE A FULL FAMILY OF VEHICLES, WHAT ALL OF YOUR DATA SAYS IS THAT PEOPLE WANT THE FINEST QUALITY, THE BEST FUEL EFFICIENCY, ALL THE SAFETY FEATURES, ALL THE SMART DESIGN AND THEY WANT THAT IN EVERY SIZE VEHICLE. WE ABSOLUTELY ARE SEEING THE UPPER END OF ALL THE FEATURES ON ALL THE VEHICLE, ESPECIALLY ON THE SMALLER ONES BECAUSE PEOPLE WANT NEAT SMALL CARS.

LeBEAU: DOES THIS MEAN WE'RE EXPECTING GREATER DEMAND FOR THAT LOWER INITIAL PRICE POINT VEHICLE, THE SMALLER VEHICLE, AS OPPOSED TO THE LARGER SEDANS?

MULALLY: I THINK IT WILL BE A PRETTY BALANCE GOING FORWARD. THE NEAT THING ABOUT THE FORD PLAN IS THAT WE WANT TO HAVE THE VEHICLES THAT PEOPLE WANT AND THE DIFFERENT PRICE POINT AND LET THEM DECIDE WHAT WORKS FOR THEM. SMALL MEDIUM OR LARGE. WE HAVE DESIGNED THE VEHICLES TO PROVIDE THAT FLEXIBILITY, THOSE OPTIONS THAT THEY CAN CHOOSE.

LeBEAU: I WANT TO ASK YOU ABOUT WHAT'S HAPPENING WITH LINCOLN. YOU HAVE A MEETING THAT'S GOING TO BE COMING UP NEXT WEEK WITH LINCOLN DEALERS. HOW MUCH ARE YOU GOING TO DEMAND THAT THEY DRAMATICALLY IMPROVE THE QUALITY OF THEIR DEALERSHIPS AND THEY RISE TO A HIGHER LEVEL.THAT'S A WEAKNESS WHEN PEOPLE LOOK AT LINCOLN RIGHT NOW.

MULALLY: CLEARLY WITH OUR DECISION TO INVEST NOW IN LINCOLN AND REALLY BRING BACK THAT LUXURY EXPERIENCE WITH THE LINCOLN LINEUP, A BIG PART OF THAT'S GOING TO BE THAT WE ABSOLUTELY KEEP ENHANCING THE CONSUMER EXPERIENCE ASSOCIATED WITH THE QUALITY OF THE VEHICLE. THAT'S GOING TO BE A VERY IMPORTANT PART OF THE CONVERSATION THAT WE ARE GOING TO HAVE WITH OUR FORD AND OUT LINCOLN OWNERS.

LeBEAU: ARE YOU WORRIED RIGHT NOW THE LINCOLN DEALERSHIPS IS A BIG OF A DRAG ON THE BRAND IT'S GOING TO BE TOUGH TO CONVINCE PEOPLE IT'S AN UPSCALE BRAND?

MULALLY: I DON'T THINK SO. WE STARTED THIS FOUR OR FIVE YEARS AGO WHERE WE WANTED TO RIGHT SIZE OUR ENTIRE DISTRIBUTION CHANNEL TO THE REAL DEMAND. WE MADE GREAT PROGRESS IN A COLLABORATIVE WAY TO GET THE DEALER NETWORK SIZE AND BE IN THE RIGHT PLACES TO GET THEIR PROFITABILITY UP. WE'RE AT A PLACE WHERE WE CAN TAKE THIS NEXT STEP LIKE WE DID WITH FORD. WE'RE GOING TO TAKE THE NEXT STEP WITH LINCOLN.THEY ARE VERY EXCITED ABOUT CREATING THIS FANTASTIC NEW LINEUP OF LUXURY VEHICLES.

LeBEAU: THAT MEANS PUTTING A LITTLE MORE INTO THE DEALERSHIP. ALAN MULALLY, BACKSTAGE BEFORE THEY INTRODUCE THE FORD ST HERE IN PARIS.

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