Ford CEO 'On the Record' on the Proposed Auto Bailout, Golden Parachutes and More

This is a rush transcript from "On the Record ," December 17, 2008. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: The CEO of Ford goes "On the Record." But first the breaking news--Chrysler is confirming it will close all 30 of its manufacturing plants for 30 days beginning this Friday, and all impacted employees will not return to work any sooner than January 19, 2009.

All of Chrysler's manufacturing plants are in North America.

Meanwhile, the big three automakers are scrambling to get a federal bailout. Donald Trump said this today to Neil Cavuto about a potential bailout for the big three.


DONALD TRUMP: You can't just throw the money at the auto companies. You have to get concessions, whether it's in bankruptcy or not. And bankruptcy is not the worst thing. You would make a much better deal if they threw it into a chapter than if they did financing.

But those people, they really have to -- you have to get concessions from the auto companies.


VAN SUSTEREN: So here is a simple question. Does Ford want any of your money for a bailout? Moments ago we spoke to Ford CEO Alan Mulally.


VAN SUSTEREN: Sir, thank you very much for joining us.


VAN SUSTEREN: Before we get started and get into more of the meat and potatoes of this interview, I need to tell the viewers and perhaps to you that I learned last night that my retirement fund, stock investment, has some Ford assets in it, so - Ford stocks or bonds. So I just want to reveal that to the viewers -- not a lot, but some. So there you go, it's all now disclosed.

All right now, let me ask you -- does Ford need money?

MULALLY: We do not. And, of course, we joined the industry and joined our colleagues because the industry is so important for the U.S. economy that we wanted to lend our support.

And of course, at this time, with our plan that we're on, we have sufficient liquidity, we believe, to make it through this recession and keep going on our transformational plan.

VAN SUSTEREN: Why do you want to help them out? They're competitors. Wouldn't you rather see Ford sort of outsmart the other two and be successful, and you can pick up some of the buyers of GM cars and of Chrysler cars?

MULALLY: Well, it is a very interesting dilemma, because the industry is so interdependent that nearly 70 percent of the dollar value of any one of our cars is with our supply base, and our supply base produces about 70 percent of their volume go to all three of the manufactures, plus the Japanese.

So the concern is, of course, that if a major automobile company would go into bankruptcy, that it could take the suppliers into bankruptcy, and then ultimately take us into bankruptcy.

So the most important thing is as an industry that we stay viable, because we just need to be part of the recovery of the U.S. economy.

VAN SUSTEREN: So if your car sales are up in Europe, I know they are- -I know that Bill Ford Jr. has said that December has been a relatively good month, or a better month than expected for Ford. You don't want money. You are just sort of the guy who is going along to help.

Can you say right now that you do not want any taxpayer money? Because a lot of taxpayers, they do not want to bail out the car industry, because everybody is having economic problems.

MULALLY: I understand completely, and we have all the respect for taxpayer money, and our plan is to not access the U.S. money. We believe we have sufficient liquidity that we can continue our transformation of Ford.

Watch Greta's interview

VAN SUSTEREN: You say "access," though. But the minute we put the money on the line as taxpayers, we have got to sort of figure that out when we try to figure out who to bail out, who not to bail out.

I guess what I'm trying to extract from you is an agreement that you don't need any money at all, so at least if that's -- that money won't be set aside for you, or at least mentally set aside, but can go to somebody else or some other industry if someone needs it?

MULALLY: The way Congress asked us for the information about the industry was they know that no one can predict the future, so they asked us for a range of what we would need if the U.S. economy further degraded substantially. And that is where we came up with a line of credit, that we would need some money if the industry and the economy slowed down even more. So that is where our estimate comes from.

But we clearly do not believe we need the money going forward.

VAN SUSTEREN: I don't mean to corner you on this, but why not just - you know, if you need the money, come back later. But right now, do not even be part of asking for any line of credit in case you need it, because it makes the rest of us feel uneasy when we hear that a major corporation at least expects a line of credit, that we've made some agreement.

Why not just say no right now? We do not need anything. If we need something, we will come back and talk later.

MULALLY: That is exactly what we have done. And we have already provided them the information they requested, that if it turned out that way, what would it mean? So we are not asking for anything now.

VAN SUSTEREN: And right now on the horizon, no cash for Ford is needed.

Now, as relates to GM and Chrysler, because you said that you're interested in what happens to those two automakers -- look, a lot of us think that it needs restructuring. I think even they admit they need restructuring.

The problem is, why not do it through a bankruptcy court, since the people who have been running it right now apparently did not have the wisdom or the foresight to restructure before now.

MULALLY: I think the thought about that is that in bankruptcy, in consumer goods like an automobile, where you have good choices, is that the sales would fall off so fast because people would not even consider buying a car from a bankrupt company.

So I think that is why our competitors have suggested that they do this bankruptcy -- out of bankruptcy with the help of the U.S. government. And I can sure understand that point of view.

VAN SUSTEREN: Now, the CEOs have said they will work for a dollar a year. Are you one of these dollar-a-year guys?

MULALLY: You bet. It is really a symbol and a respect for the U.S. taxpayer, because we do not want to have to use this money if at all possible. We are not asking for the money. But I absolutely did commit that if it came to that, that I would accept the dollar a year.

VAN SUSTEREN: Are there any options tied to that structure, and any sort of pay package should you leave? Is there anything else? Because lots of times, these dollar a year - you know, maybe a dollar a year on salary, but you've got these other sort of backup compensation programs.

MULALLY: No, I understand that even with the TARP and also with the legislation they are thinking about for the automobile industry, they have very, very stringent and specific conditions attached to that. And they are working on those now.

And, again, it is not our plan to access that money. But if we did, we would comply with the conditions.

VAN SUSTEREN: That is not my question -- what I am talking about is at the end of 2009 when you file your tax return, will it say $1, or will it have the possibility of options and some pay package if you leave? Is there something else built into this? Because Americans are putting a lot of money on the line, possibly?

MULALLY: Our plan is to not access that cash and be in that situation.

VAN SUSTEREN: I don't mean that. I mean your pay from Ford. Is it more than a dollar in any form? You know, more than $1 pay? Are there options? Is there a parachute when you leave, should you leave?

MULALLY: What I am just trying to share with you is that that proposal is if we access the money. We are not accessing the money today, and if we did access the money, we would comply with all of the conditions the U.S. government would put on that access.

VAN SUSTEREN: So the offer of $1 a year by you and others is only if there is a bailout. Otherwise, it is not on the table.

MULALLY: All I can talk about is Ford, and our plan is to not access the money.


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