'We see a gradual recovery in car sales'

Davos: The Ford Motor Company says it's adding 1,200 staff at two plants in Chicago to build the next generation of Explorer SUVs. The company is investing nearly $400 million (Dh1,4 billion) into the new production.

Richard Quest: After all, isn't it quite unusual in the auto industry at this particular time [to hire new staff and invest]?

Alan Mulally: It's a very exciting development. As you pointed out, because we are announcing today that we are going to make our new Explorer vehicle in Chicago and we're going to be increasing production starting in the fourth quarter of this year and actually be offering some great opportunities for new employees.

These, of course, are new employees at new terms, which, in today's realistic environment, perhaps are not as generous as in the old days. But these are new jobs, nonetheless, which tells us something of what's happening in the auto industry.

Well, exactly, Richard. And, as you know well, we operate around the world. And what we see is a gradual recovery in the economy and in new car sales in the United States. But we're also seeing this in Europe, and, also, we're seeing it in Asia-Pacific. And, of course, Ford's commitment is to serve all the customers of the world with the best cars and trucks in the world. So this is a very positive development for all of us, to get the economy going again.

As you look at your Ford world, whether it's the US or the Americas, Europe or Asia, which bit do you think is still in need of some work?

Well, when we look out in the future, Richard, we see about one third of the market being in the Americas, about one third of the market for all of — of the cars going forward will be Europe and Russia and about one third of the market will be the Asia-Pacific region. And so we continue to operate in all those regions around the world. And now, we probably have the broadest family of small, medium and large cars, utilities and trucks, all of which are best in class now, to support our customers in each of those markets around the world. So we see them all growing going forward here.

But are you seeing a return to growth in all of those markets, because you've said that you expect Ford to return to solid profitability by next year. I assume that you're still hoping and are on track for that. But which part of the world do you see that growth coming into?

Well, we see it in all of the regions around the world. You know, clearly, the United States and Europe are larger, more mature markets that are continuing to grow. But, also, Asia-Pacific is about one third of the market and it is growing even faster. So back to your comment about our business performance. You know, we were profitable in all our Ford operations all around the world in the third quarter of last year. We'll be updating our guidance for 2010 this week, when we do our analyst call. Then we absolutely believe that we are on track to be solid profitably around the world in 2011.

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