This is a partial transcript from Your World with Neil Cavuto, January 8, 2002. Click here to order Tuesday's entire transcript. 

NEIL CAVUTO, HOST: Shares of DaimlerChrysler losing about a half-a- buck on Tuesday. The company has been making sweeping changes to emerge from a sea of red ink, especially when it comes to designing its cars, like a future hybrid vehicle simply called the Pacifica. It's a cross between a sport-utility vehicle and a station wagon.

Earlier, I spoke with Chrysler president Dieter Zetsche, and I asked if the Pacifica will be his ultimate replacement to the SUV.

(BEGIN VIDEOTAPE)

DIETER ZETSCHE, PRESIDENT, CHRYSLER: I don't think that the Pacifica will replace or the segment — we are refining the new segment with this vehicle — will replace an existing segment. But it will add and it will attract customers from all existing sectors because it is really offering the customer added use which no other product in this combination could offer.

CAVUTO: Well, there are others who argue with you there. The Lexus folks with their RX-300, the Honda folks with their Acura MDX and the Buick folks with their Rendezvous. What say you?

ZETSCHE: Well, I would say that you should not argue with a customer. And we made products lines and asked the customer. And the customers told us that there is no direct competitor. They would compare that they would see a (UNINTELLIGIBLE) new approach, a new segment defined by this vehicle.

CAVUTO: And it's the uniqueness of this vehicle, if I understand you, is that it is more car than truck, right?

ZETSCHE: Well, the uniqueness is that it offers the space, the flexibility and the roominess of mini-vans or SUVs, but at the same time, the elegance and the driving behavior of a car. And this combination is unique.

CAVUTO: But again, the fact that folks like Lexus have been at this a while longer, even though you argue they are different types of cars or vehicles, do you feel you are behind the eight ball?

ZETSCHE: No, certainly I don't think we are behind. I think we are ahead. I think with the PT Cruiser, we were the first one to define a segment cluster out of their traditional categories. And I think we continue doing so with the Pacifica.

CAVUTO: Now there is a great deal of buzz about that Pacifica. But more to the point, what happens before it comes out? I guess this is a 2003, 2004 vehicle.

ZETSCHE: Yes.

CAVUTO: In the meantime, when do you start making money again?

ZETSCHE: Well, when we laid out our turnaround plan a year ago, we said that in the year 2002, we would intend to break even, even though all of the parameters, external parameters, have deteriorated since this announcement. We are clearly committed to this target, and thereby ask within 2001, intend to further deliver on our promises.

CAVUTO: All right. So in 2002, you expect to break even this year?

ZETSCHE: That's right.

CAVUTO: 2003, start making money that year?

ZETSCHE: That's right.

CAVUTO: Let me get your take on layoffs here. Ford, of course, shocked a lot of folks by getting rid of 20,000 workers. Are the layoffs done at DaimlerChrysler?

ZETSCHE: Well, our intention was when we would announce a turnaround plan, to do it once and forever. And at least so far, there are no other plans to extend what we announced a year ago. We are in the face of execution of this plan, and it works very well so far.

CAVUTO: Let me ask you finally about incentives, sir. I mean, a lot of cars left a lot of showrooms last year, but at a cost to you guys. I mean, you were practically giving them away. Are you afraid that customers have become spoiled, that they won't buy unless they are getting hefty rebates or incentives of that sort, and that if you don't do that, they are not going to buy?

ZETSCHE: Well, we had to live with this environment this year, especially since September 11. And we clearly try to focus on our products and the quality of our products and the value of what we are offering to the customer. But of course, we live in a competitive environment, therefore, we are impacted by what the competitors decide to do.

So far, we were pretty successful in finding the right balance between the volume and the incentive level. We are now the one company, the one manufacturer in town offering the lowest incentives, but still the highest value to our customers. And we intend to continue to do so.

CAVUTO: What will that Pacifica go for when it comes out?

ZETSCHE: Well, we have not announced the price, but it will be a very affordable vehicle and, again, great value for what it offers for its content and all its characteristics.

CAVUTO: So $20 to $25,000, maybe more?

ZETSCHE: Well, certainly, there is a starting point in the range of $25,000. It is not unrealistic, and depending on the equipment, it goes from there.

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CAVUTO: We shall see.

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