• With: Alan Mulally, Ford Motors president & CEO

    This is a rush transcript from "Your World," September 18, 2012. This copy may not be in its final form and may be updated.

    NEIL CAVUTO, HOST OF "YOUR WORLD": There's another company doing well in the midst of all this, not just Apple. My next guest no stranger to the global hit; Ford sales slowed 29 percent in Europe last month, but the company is hoping the new Fusion will help drive business forward.

    Ford CEO Alan Mulally unveiling it today in Times Square. Good to see you.

    ALAN MULALLY, PRESIDENT & CEO, FORD MOTOR COMPANY: Good to see you, Neil.

    CAVUTO: You know, the sales down drift not withstanding abroad, you guys have been making lemonade out of lemons for a while. But there are not a lot of CEOs doing that. Not a lot of companies doing that.

    And now many more warning. Before we get to the Fusion, are you worried about that overall macro trend?

    MULALLY: Well, like we talked last time, this is the slowest recovery we've ever had from a recession. Now, having said that, this is the biggest recession that we're recovering from. And the neat thing about the Ford position is that during the toughest of times, we continue to invest in the products that people really want and value. And even though the economic expansion is one-and-a-half to two percent, we have this tremendous pent-up demand where the average age of vehicles now is over 11 years old. So, these new vehicles from Ford, they are able to economically (INAUDIBLE) the older one.

    So, the neat thing is we're here, we're part of the expansion with the vehicles people really do want in value.

    CAVUTO: Obviously there's big demand for the Fusion, but GM is trying its own fuel-efficient cars. It wants out from under the government's thumb. You've probably heard that. Apparently the government is saying, not yet; doesn't want to sell the stock on a loss. What do you think of that?

    MULALLY: Well, I really like the Ford plan. And you know, we talked about this five years ago. We clearly put a plan in place to transform Ford based on restructuring ourselves to operate profitably, but also accelerating investment in the new vehicles.

    And to your point, that was one of the neatest things about the Fusion launch today is that we didn't just bet on one technology demonstrator. We decided we wanted to electrify an entire product line and give people the power of choice. So that new Fusion today has a gas engine. It also has an eco-boost engine with direct-fluid (ph) injection and turbo-charging.

    And you can also get it in hybrid, but also in our plug-in hybrid. The neat thing is we are making it on the same production line. Seventy percent of the parts are exactly the same. We're matching production to the real demand. And because --

    CAVUTO: You know what's brilliant about your entire response. You ignored my question --

    MULALLY: No!

    CAVUTO: -- which I think is brilliant.

    MULALLY: It's a good answer -

    CAVUTO: GM has a hybrid of its own that's had some problems that apparently taxpayers underwrite to almost $80,000, depending on the number. Yours, you argue, is better.

    MULALLY: Well, the data absolutely does set you free. We announced the Fusion today and the Fusion Hybrid, 47 miles per gallon.

    CAVUTO: That's like Prius mileage.

    MULALLY: It's absolutely fantastic. Eight miles - eight miles per gallon better than the Toyota Camry.

    CAVUTO: So, GM must stink, right?

    MULALLY: Customers have a -

    CAVUTO: GM must stink. They must totally stink.

    MULALLY: We are focused on the customers.

    (LAUGHTER)

    CAVUTO: Do you think looking out GM wants to get out from under the government's thumb reminds you how wise it was not to get bailed out? To resist the government takeover, as you did. You didn't need it. But now looking back, are you glad you didn't do it?

    MULALLY: Oh, absolutely, Neil. I remember talking to you about it right at that time. That was one of biggest decisions we've ever made. Clearly, the United States was in a very, very tough situation at that time.

    CAVUTO: Now, you are - you were for bailing those others out? Right? Because -

    MULALLY: Well, absolutely. Remember, we actually testified on behalf of temporary help for GM and Chrysler because we had concluded, just like two other administrations that if GM and Chrysler, who were completely bankrupt, went into free fall, they could have taken down the industry and the U.S. economy from a recession into a depression. So --

    CAVUTO: But you don't think you would have survived that or Toyota with plants here, or Honda with plants here?

    MULALLY: All of us would have been in real trouble.

    CAVUTO: Really?

    MULALLY: The reason we did it was that you know, the (INAUDIBLE) street is nearly 12, 15 percent of the U.S. GDP. We could've really contributed to the U.S. going from a recession --

    CAVUTO: So that rescue was a good thing?

    MULALLY: I think it was right thing to do at the time, but to your point, I am just so pleased that we did not access one dollar of taxpayer money because we clearly were on a plan to create a viable Ford way before the recession hit.

    CAVUTO: You know Mitt Romney was against the bailout. Many argue it's costing him in Michigan, costing him even in Ohio, Should it?

    MULALLY: Well, again, I can just speak from Ford's point of view. For the good of the industry -

    CAVUTO: If he says he drives a Fusion,

    MULALLY: -- and the good of the U.S. economy, we did the right thing.