This is a partial transcript from Your World with Neil Cavuto, October 15, 2002, that was edited for clarity. Click here for complete access to all of Neil Cavuto's CEO interviews.

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NEIL CAVUTO, HOST: Delphi Corporation, the world's largest maker of auto parts, beat Street expectations today. The growth was driven primarily by stronger non-GM sales that rose 19 percent. With us now, the chairman and CEO of Delphi, J.T. Battenberg.

J.T., good to have you.

J.T. BATTENBERG, CHMN. & CEO, DELPHI: Hi, Neil.

CAVUTO: Just talking to Ben Stein, he says the economy could percolate again, but earnings will be quite a ways out after that, what do you make of that?

BATTENBERG: Well, the auto industry is pretty solid right now, throughout the world actually. We supply electronics and systems to 32 car and truck makers around the world. Our growth was up. Revenue was up 19 percent in this quarter on non-GM revenue, and overall up to $6.4 billion which is the 3.5 percent revenue growth. So we are seeing revenue come in pretty strong, net income up was 64 percent for the third quarter. And most important of all, cash flow was up, free cash flow up to $225 million.

CAVUTO: Yes, but how are you pulling that off, J.T., in an industry, we've talked to a lot of the big three guys over the last few days, and a lot of them are saying, yes, we can get the cars off of the lots and all that, but we are practically giving them away. How does that affect someone like you who supplies this stuff to them?

BATTENBERG: Well, Neil, as you may recall, when we talked at the beginning of the recession a couple of years ago, we took a very aggressive stance two years ago and put in place a redundancy program and retirement program. And we have reduced our work force by a little over 25,000 people. That's now in the 9th inning, it's almost wrapped up. So we are running as we are seeing the recession wind down, car sales are now approaching levels where they were three years ago, two years ago, but we are building those vehicles with 25,000 less people. So productivity is up, margins are up and accordingly we're beginning to see the fruits of downsizing during the recession.

CAVUTO: You say the recession is just about over. Is it?

BATTENBERG: Well, I think if you look at all the economic indicators, there are some pretty solid signs there. And certainly cars and trucks are priced where it is hard not to buy one. I mean, the ability of people to buy cars and trucks has never been better. And prices are down. So I think there is still a good run ahead. We've got orders in hand for the next two months to finish out the year. And the fourth quarter is going to be very strong. We will have a fourth quarter that's up quarter to quarter and the audit banks look good.

CAVUTO: It's interesting because you guys benefit but the auto stocks themselves do not, what's that about?

BATTENBERG: One of the things we are benefiting from is our diversification program. We are growing our business outside of General Motors and we just announced this week, a $2 1/2 billion contract for electronic, the common rail diesel systems with Renault for example. And that is the third billion dollar-plus contract we've announced in the last 30 days. So we are seeing a lot of growth that's going to hit us over the next two or three years.

CAVUTO: J.T. Battenberg, thank you very much, good seeing you again.

BATTENBERG: Thank you.

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