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Ford CEO on bailout opposition: Past is past

  • Story Highlights
  • CEO says bailout would allow Ford to "be part of this economic recovery"
  • Mulally to testify alongside heads of GM, Chrysler, autoworkers' union
  • Ford waited to make electric vehicle until it improved traditional engine, Mulally says
  • CEO: "We have a business plan" to make higher-quality vehicles with better mileage
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(CNN) -- Ford Motor Company chief executive Alan Mulally defended his company Tuesday against charges that Ford caused its own problems and said bailing out Detroit was essential to the U.S. economic recovery.

Ford CEO Alan Mulally says Tuesday the auto industry "is just absolutely essential" to the economy.

Ford CEO Alan Mulally says Tuesday the auto industry "is just absolutely essential" to the economy.

Hours before Mulally and other heads of the Big Three automakers were scheduled to testify before the Senate Committee on Housing, Banking and Urban Affairs, Mulally appeared on CNN's "American Morning" to discuss his expected testimony.

Mulally told CNN's John Roberts that Ford took time to develop an electric hybrid car because its top priority was making the internal combustion engine more efficient. He also defended the company's advertising blitz for the F-150 pickup truck and said the company had been working on improving its fuel efficiency long before there was talk of bailing out Ford, General Motors and Chrysler.

John Roberts: Why should taxpayers give you any of their hard-earned money?

Alan Mulally: Well, I think the compelling argument is that the automobile industry is just absolutely essential to the United States' economy. We are in an economic situation now, with the credit crisis and the financial and the banking issues, that we really, more than ever, the automobile industry needs to be part of the solution. And the only thing that we're asking for is to set up a bridge loan mechanism so that if the economy continues to deteriorate in the near term, that we could access that so we could continue to invest in the products that people really do want and value and help be part of this economic recovery. Video Watch Mulally defend Ford's call for a bailout »

Roberts: But you know what the critics are saying. Critics are saying that you fought efforts as an industry to increase fuel economy standards, you promoted SUVs and pickups as demand for foreign oil increased, and we're beginning to run out of oil. They're saying basically you failed to lead, and now you have your hand out saying, "Help us."

Mulally: And for that we also recognized the cost it would take to do that, so the Congress built into that legislation a mechanism that we could borrow at the Treasury rate so we could fund the acceleration of these vehicles and bring them to the marketplace. That is going very well. We are applying for that today. I think the most important thing is that we continue as a country to work this as a partnership and clearly fuel efficiency, quality, safety are going to continue to be at the top of the customer's decision list when they purchase a car. Video Watch what it could cost to let the Big Three crumble »

Roberts: At the same time, Mr. Mulally, the people who will be asking you questions this afternoon are looking for some guarantees. Chris Dodd is the chairman of the committee that you'll be sitting before. Here's what he said in terms of wanting some guarantees from the industry: "Clearly, we shouldn't be writing checks without some clear conditionality of what's going to happen with that industry, if they're going to change and get back on their feet again." Can you guarantee to the American people that if you get that money, if the American taxpayers throw you a lifeline, you will change, you'll become more efficient, you'll produce cars that people want to buy, you'll increase fuel efficiency, you will, indeed, move into the future? Video Watch why Congress wants to hear from Mulally »

Mulally: Absolutely. I don't think it's a promise. I think it's a promise that we are already delivering on today. When you look at the Ford lineup going forward, we have now cars, small, medium, and large cars, utilities, and trucks that are absolutely world class in their quality, in their fuel mileage, in their safety -- on par and competing and in many cases much better than Toyota and Honda. We have a business plan.

Roberts: One of the cars you'll be introducing in 2009 is the Ford Fusion hybrid, and you are very excited about that, but it's being introduced 12 years after Toyota introduced the Prius. Why did it take so long?

Mulally: Well, that's really one model of the vehicles. The very first hybrid was introduced by Ford with the Escape.

Roberts: It was an SUV.

Mulally: Absolutely, but we have been there on the fuel efficiency from day one, and it's been part of Bill Ford's original vision of sustainability and energy efficiency and being better environmentally concerned.

Roberts: Here's a question I have this morning. I think a lot of people are asking this same question as well. You are betting that because the price of gasoline is now down to an average of about $2.06 a gallon nationwide that that will rekindle interest in your Ford F-150 pickup truck line, and I know that you are trying to improve the fuel efficiency -- I think the latest model is 15 [mpg] city, 21 miles to the gallon on the highway. Some people are thinking, "Oh my God, the price of gas is going down, and now you just want to repeat the mistakes of the past all over again." iReport.com: Your thoughts on the Big Three bailout

Mulally: That's absolutely incorrect because our plan is to have a full portfolio of small, medium, and larger vehicles that our consumers really want, and clearly the 150 that you have described has been the industry leader in the United States for 34 years, and the consumers love and need that vehicle. They absolutely love the 150. We are complementing that now, just like you mentioned, with small- and medium-size cars and utilities, all of which will be best in class on fuel efficiency. So we want to be there with a full portfolio that the consumers really do want.

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Roberts: General Motors has got an electric car coming out. It's not going to come out until 2010, 2011. Does Ford have a fully plug-in hybrid vehicle coming? Video Watch how despite woes at home GM hopes to expand abroad »

Mulally: We are working on that also, but let me just share with you the Ford plan about that. Our No. 1 priority is to improve the internal combustion engine, and that's why the turbocharging, the direct fuel injection, we get a 20 percent improvement in fuel mileage and a 15 percent reduction in CO2, but we get that across all of the engines, across all the vehicles. Then we move to more electrification with the hybrids as you mentioned, and we are very excited that the next step after that will be full electrification. Now we're tied into the grids, and we really have moved to an energy independence solution.

All About Ford Motor CompanyAlan MulallyGeneral Motors CorporationU.S. Senate Committee on Banking, Housing, and Urban Affairs

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