Good day, ladies and gentlemen, and welcome to the Ford Motor Company Second Quarter Earnings Conference Call. At this time, all participants are in listen-only mode. Later we will conduct a question-and-answer session. (Operator Instructions) As a reminder this conference is being recorded for replay purposes. I would now like to turn the presentation over to Mr. [Brian Harris], Director of Investor Relations. Please proceed, sir.

Welcome to all of you, who are joining us today either by phone or webcast. On behalf of the entire Ford management team, I would like to thank you for spending time with us this morning. With me here today are Alan Mulally, President and CEO of Ford Motor Company; and Lewis Booth, Chief Financial Officer, also in attendance are Bob Shanks, Vice President and Controller; Neil Schloss, Vice President and Treasurer; [Paul Andonian], Director of Accounting; and K.R. Kent, Ford Credit's CFO. Before we begin, I would like to cover a few items. Copies of this morning's press release and the presentation slides that we will be using today have been posted on Ford's Investor and Media Website for your reference. The financial results discussed herein are presented on a preliminary basis. Final data will be included in our Form 10-Q. The financial results presented here on a GAAP basis, and in some cases on a non-GAAP basis. The non-GAAP financial measures discussed in this call are reconciled to the US GAAP equivalent as part of the appendix to the slide deck. Finally, today's presentation includes some forward-looking statements about our expectations for Ford's future performance. Actual results could differ materially from those suggested by our comments made here. The most significant factors that could affect future results are summarized at the end of this presentation. These risk factors and other key information are detailed in our SEC filings, including our annual, quarterly and current reports. With that, I would now like to turn the presentation over to Ford's President and CEO, Mr. Alan Mulally.

We are pleased today to report very solid financial results for the second quarter, which underscores our ONE Ford plan is clearly working. Ford earned a pre-tax operating $2.9 billion for the quarter as each of our major business operations around the world posted improved profits compared to last year and the first quarter of 2010. We generated positive automotive operating related cash flow of $2.6 billion and strengthened our balance sheet paying down $7 billion of debt and lowering our interest costs. At the same time, we are increasing our investments to support greater growth in the future. Overall, we are ahead of where we thought we would be after this excellent first half. We clearly remain on track to deliver solid profits and positive automotive operating related cash flow for 2010, and we expect even better results in 2011. The driving forces behind our progress include our new products and our leaner global structure. We have developed, we and many others believe, is our finest ever product line up. The full family of vehicles with world-class quality, fuel efficiency, safety, smart design and the best value. I will start up this morning by providing you with an overview of our financial results and business, product and sales highlights. Then Lewis Booth will walk us through the financial results in even greater detail. Finally, I will summarize our 2010 outlook and our plan going forward. Turning to Slide three, I'll begin by reviewing the key financial results compared with year ago. As we mentioned last quarter, based on our agreement to sell Volvo, all of our Volvo's 2010 results are reported as special items and excluded from our wholesales revenue and operating results. 2009 results include Volvo. As show at the top of the slide, second quarter vehicle wholesales…

Let's move on to Slide eight, which summarizes our financial results compared with a year ago. Our second quarter pre-tax operating profit excluding special items was $2.9 billion, a $3.5 billion improvement. Most of the remaining slides will focus on these pre-tax operating results. Our pre-tax operating profit excluded unfavorable special items of $95 million, which we will cover on the next slide. We recognized $251 million of tax expense, a $266 million increase explained primarily by the non-recurrence of a prior year tax settlement. As a reminder, our continued low effective tax rate is primarily the result of our valuation allowance against deferred tax assets. As we established a sustained period of profitability over time we will need to evaluate elimination of the present valuation allowance against deferred tax assets. This change will result in the accrual of tax expense to more normalized rate and this will impact earnings per share, but importantly will have no impact on cash flow. Bottom line, second quarter net income attributable to Ford was $2.6 billion, a $338 million improvement, which was reduced by the non-recurrence of a prior year gain of over $3 billion on debt restructuring actions. Slide nine covers special items, which an unfavorable pre-tax amount of $95 million in the second quarter. We recorded $229 million of personnel and dealer related charges, including primarily costs related to the discontinuation of Mercury. The first half cost associated with Mercury discontinuation and total US dealer reductions is expected to be somewhat less than half of the total expected special items charges for these actions during the 2010 and 2011 period, but also $94 million of favorable held-for-sale adjustments for Volvo reflecting its operating profit another held-for-sale related items, including cessation of depreciation. As shown in the memo, we had continued to…

On Slide 28 that we provide an overview of the business environment going forward. The global economic recovery continued in the second quarter and we expect a modest pace of growth to be sustained. This year's global industry volume is projected to be up by 5% to 10% compared with last year's level of 65 million units. Many scrappage and other government incentive programs are ending, primarily in the European markets. This impact on global volume, however, is offset by year-over-gains in China, India, the US and Brazil, as well as other emerging markets. Market recoveries in Asia are moderating, but the markets remain very strong. We also continue to see relatively weak growth in consumer spending in the United States and Europe, reflecting weak labor markets and tight credit conditions. These conditions are improving slowly. The debt crisis in Europe would generate significant fiscal tightening, which is likely to act as a near-term drag on growth. Central banks around the world are beginning to wind down many of the special lending programs that were implemented at the height of the financial crisis. However, low levels of interest rates in the United States and Europe will continue to support economic growth. In China, India and Brazil, the strong rates of growth earlier this year have already generated some tightening with the monetary policy to contain inflation pressures. Commodity prices remain significantly higher than last year's lows, although the strength has moderated in recent weeks. Crude oil prices in the $70 to $80 per barrel rates are up about 50% from last year's lows. Overall, the global business environment remains challenging, but we expect global growth to continue. Slide 29 summarizes the status of our key planning assumptions and operational metrics for the first half and our 2010 full year outlook.…

Ladies and gentlemen, we are now going to start the Q&A session. We have about 45 to 50 minutes for the Q&A period. We will begin with questions from the investment community and then take questions from the media, who are also on the call. In order to allow as many questions as possible within our timeframe, please keep your questions brief. [Tuwanda], can we have the first question please?

(Operator Instructions) Your first question comes from the line of Patrick Archambault with Goldman Sachs.

Congratulations on a very good quarter. I guess one place I wanted to start was just a little bit more on FMCC, which clearly came ahead of expectations. A couple of question there and I don't know if you said it already, but can you just remind us of what the dividend plan is? How much there is less? I think you had originally said $2 billion for this year? How much of that is left? Is there any intention to increase that just given the very strong results there? The second question, I realize that you said that some of the credit quality improvement aspects would be not as positive in the second half, but I wanted to hear a little bit about that, because it seems like if we look at past credit cycles improving credit quality was indeed something that you were able to see positive tailwinds from for a while, so wanted to get your sense of that. Then lastly, can you talk a little bit the impact of subprime, which has been in the press recently as being one of the factors responsible for lower than expected sales. Obviously we saw this large GM deal announced yesterday, so I wanted your thoughts on that as well.

Lewis will do the first question and we have K.R. with us here also and he will address the other ones.

Just for clarification on the dividend, we said it would be $2 billion for the year, and this $1.5 billion still to go. With that I'm going to pass you over to CFO of our strategy asset K.R. Kent.

Patrick, on the credit quality, I'll give you one perspective and that is on the loss to receivables and we will cover bit more in the fixed income call later today. On a world-wide basis, we had loss-to-receivables of 39 basis points for the quarter, which was extremely low. In the past, we only had actually four quarters that were lower. For example, people are paying their bills and it's very encouraging in an environment, where you know consumers are stressed out there. As a result of the low loss-to-receivables, we had to reduce our credit loss reserve. For the first half of the year, we reduced them for about $450 million. Our view is that it won't continue at that pace. Obviously, the reserve just can't keep going down over time, so eventually that will slowdown. That's what we are seeing in the second half that reduction will slow down. Your last question was on subprime and how that plays into our sales. At Ford Credit, we do support subprime, we have always supported subprime. It is an important part of the market for the company to sell vehicles in that market. Effectively, we've always participated in it, we buy a broad spectrum of business and we've been successful. I think you see it in your securitizations that are out there that are publicly traded. They include subprime, they include prime and they all perform very well.

Just as a follow-up to that K.R., how has subprime been behaving? I think there was some data that's been published out there that suggest that whereas credit availability has been pretty good across the board, that's one area where it's actually tightened. The idea of being that if it were to go back to more normal levels would obviously be favorable for sales. What are your thoughts on that just broadly for the market?

I really speak about for us. In total, and we do obviously have the details that we split and look at subprime versus nearprime versus prime, and in our portfolio but we don't typically express that on a public basis. Then total portfolio continues to perform very well, and that's about as far as I can go.

Your next question comes from the line of Himanshu Patel with JPMorgan.

Two questions. First, I just wanted to clarify. Did you say $1 billion rise in 2010 for both, structural cost and also commodity cost?

Yes, both.

What is driving the $1 billion increase in the structural cost? Is it capacity engineering, labor? Can you just give us some color on that?

Yeah. It's a mixture of things. It's the cost associated with increased production, so it's volume-related cost. It's increased engineering depreciation, amortization of the new products we are developing for future growth, and finally the advertising and sales promotion associated with the launch some of those new products, so it's all the things you do expect for a company that's turning into a growth period and seeing its volumes increase.

Lewis, what do you think of that number seeing another sizeable up-tick in 2011 assuming production starts rising next year as well?

Well, if production rises, we will continue to see some cost associated with it. We've got a very, very busy launch second half, so I am not sure that I see the launch as necessarily a running rate, but I haven't spent a huge amount of time looking at that for next year, Himanshu.

Can you also give us some color on European inventories, I mean, we are seeing the Western Europe SAAR sequentially softening, but a lot of this third-party vendors like CSM and J.D. Powers are upgrading their European production forecast. Where do you characterize inventories in Europe and whether it's for Ford or for industry and kind of where were they at the start of the year?

At the start of the year, we were incredibly tight on inventories. We've been struggling to build enough cars, because the scrappage programs were so strong on small cars. We continued in that vein through the first quarter with very tight inventories. We would normally have an inventory build in the second quarter for two reasons. One, because, we are getting really ready for the summer shutdowns and secondly, because we were so tight we are down about 55 days, which is a very comfortable level, lower than the typical Europe's run-up, so we feel our inventories are well under control.

One last one, coming back to Pat's question to K.R. What was described yesterday by one of your competitors was that that asset wasn't just a good strategic fit, but it was also broadly characterized as the subprime market is just a very compelling growth opportunity for them. I am just wondering how Ford and Ford Credit view the competitive landscape in subprime right now. Have enough competitors left that space right now and have credit trends improved sufficiently where maybe it does makes sense now for Ford to try to expand penetration rates in that segment?

I think, we are a bit different from some of the other people you've been talking about. We didn't get out of the credit market. We didn't desert any of our customers across the spectrum. We are still supporting those customers. We expect to continue to support those customers as they come into our showrooms.

Your next question comes from the line of Brian Johnson with Barclays Capital.

Two questions, a pricing one in Europe for Lewis and then a more strategic one for Alan. Lewis, where would you characterize, within that $300 million of incentive activity kind of the pockets that you are the kind of flash points for incentives, either by segment BC or by geography, country?

I characterize this across the board, Brian. It's in most countries, it's in most segments. Some of the most active of our competitors I'd say are more biased towards the small end of the spectrum in terms of that product range, so they've been in booking up from centers in that area. I think an important message for what we are doing in Europe is we are backing away from chasing some of our competitors down the very, very high levels of incentives for business that we don't is necessarily real, and you can see that at the end of each month. The year-over-year incentive level is up, but since we saw the volumes coming down in second quarter, we have really backed away from some of this business that people started indulging in. Our unit margin actually second over first. You can't see it in the data them data up modestly, which I think implies we're doing the right thing for business. We are pursing profitable business not market share business.

Okay. And is there any particular country that accounted for the bulk of that 300 million or two countries?

No. Its spread pretty down fortunately.

A question and probably both you and Alan, which is, how do you see their light commercial van vehicle business developing in Europe, in Brazil where you are active as well that in entrée for you to grow, in china? And is that going to be a bigger part of our business going forward say over the next three years?

The commercial vehicles down to the Transit size and the Transit Connect have been as you know a wonderful business for us and we see that continuing to grow in all the regions of world, Americas, Europe and Asia-Pacific. We don't have any plans at the current time to go below that size Brian.

Okay. I mean LCV like commercial vehicle.

Yes, we do see some encouraging signs in Europe of commercial vehicle business…

Well, the commercial vehicle is down to the Transit size and the Transit Connect have been, as you know, a wonderful business for us and we see that continuing to grow in all the regions of world, the Americas, Europe and Asia-Pacific. We don't have any plans at the current time to go below that size, Brian.

Okay, and I mean LCV, light commercial vehicle.

Yes, we do see some encouraging signs in Europe of commercial vehicle business, some signs of life there. In Europe, we are very, very strongest. That's not called the transit segment for nothing, and we are working with our partner in China who has a good transit business and would continue to develop the transit business with a great low cost production facility in Turkey and we still build vehicles in Britain as well.

Very good for us.

Okay, and how much of the South America and European decent profits were really driven by LCVs, specially in Europe with a weakening, as you pointed out, car market?

I wouldn't want to go in that amount of detail, Brian. Thanks for asking, though.

Your next question comes from the line of John Murphy with Bank of America Merrill Lynch. Please proceed.

Maybe a very basic question, but I think an important one. As you guys were talking about cost inflation structural cost going up. Is it fair to say and how do you think about when you launch new products that they are higher margin than out going products? Is that fair assumption to assume as you launch a new product you expect it to be higher margin and plan for it to be higher than the outgoing product even though there might be some cost inflation as we are going forward?

Well, that's a multifaceted question. Let's just talk about the structural cost. If we build more of them, we expect to attract some structural cost associated with it. Right to the very beginning of a new product launch you have some specific structural costs associated with high levels of deprecation and amortization at the beginning of the cycle, the launch expense and the plants and the advertising and sales promotion. In terms of the margins, we are going through a period where we are improving the competence of our products and as part of that improving the attribution of equipment levels of our products. That's the thing that's driving the positive performance on pricing with closing the gap with our Asian competitors in the US for example because we have got much more competitive products. Along with that, thus goes some increased material costs, but typically we would be looking at the start of a cycle to have a better margin than in the last or the previous cycle.

Okay. Then the second question is on Slide 14, when you go through the walk for North America there was no mention and I may have missed this, but it's not on the slide deck of what warranty expense did in the quarter. What your performance was in the quarter and if it was negligible or you expect that improved going forward just more color around warranty expense in North America.

We are looking at our data, just one second, John.

It's a very small amount of good news. So not material in terms of the big variance explanations. We did see in the European numbers that based on the very good warranty performance that we are able to adjust the reserve in the quarter.

Your next question comes from the line of Chris Ceraso with Credit Suisse.

I would say, probably the thing that, to me, was the most surprising and most impressive was the price performance in the quarter. I have a couple of questions on that. First what's your expectation for pricing as we get in to the second half, if I think in terms of your year-to-year profit loss like you were just talking about from slide 14? And then what you see as any risks to the pricing story and be it your product mix or introductions or any kind of competitive actions?

Well, we talked a lot about our pricing improvements being driven by improved products. We obviously have a lot of improved products coming in the second half. We don't expect to maintain the performance we saw in the first half, but we do expect to continue to see positive net pricing and included within that we do expect to incentives continue to ameliorate a little bit as our products get and more competitive.

Chris, we are also actually staying laser-focused on our plan to match our production to the real demand, which is the most important thing we do from a value point of view and the products.

Your question was primarily aimed at the North American market, but the thing, the steps we are taking in Europe not to chase through our marginal units is also important evidence of the way we are trying to run the business responsibly.

On the increase in commodity cost, the $1 billion, you used to talk in terms of both, commodity and product cost. Is there some breakdown within the billion or is it all really just raw materials or is some of that the increased content that's going into make these new products better?

The $1 billion is raw material and that the usual suspect is still aluminum and copper and the likes.

So, where do we see? Where are we missing the increase in the actual content, be it for regulatory or just for better components to be more competitive?

You will see it offset by material cost reductions. So it's the dog that isn't barking.

Then just lastly, a housekeeping item. You mentioned, Lewis, the taxes would normalize at some point here. When do we start to see the average tax rates start to creep up?

We are not ready to talk about that yet, Chris.

Your next question comes from the line of Steve Dyer with Craig-Hallum.

Nice quarter guys. Just a question, your guidance for Q3 North American production, I would have thought I guess given kind of the low inventory and your market share gains and just the continuing improvement in the industry, I would have thought that there would maybe not be quiet as much seasonality as you are indicating. What are you seeing there that leads you to be to expect things to be as normal?

Well, it really starts with our assessment on the economic growth and of course the industry, the 11.5 to 12, and then staying really focused on the right inventory and supply with the dealers and so. We worked a little bit of that on the production in the first half to make sure that with the shutdowns that we normally take and new product launches that we are matching that production's demand. So, it's about right looking at the market and looking at ours gradually increasing market share too.

What's your expectation as to what are new normal inventory level will look like vis-à-vis historical?

I think overtime it will gradually come down.

As we simplify within the product line, as we simplify our product offerings, we believe we can get closer to the customer and run low inventories but it's going to take some time for us to, long time, long term we want to move from, typically we find around 60 to somewhere maybe five to ten days lower than that.

We were really encouraged with the progress we are making because not only have we simplified the product line-up, made that really clear, but also we will continue to simplify the verbal combinations to get, really package the way the customers really want it and that allows the dealers to really simply their operations.

Your next question comes from the line of Colin Langan with UBS.

Looking at slide 12, what was the explanation for the positive exchange impact and the net interest adjustment? I was actually surprised that the change would be positive.

The exchange positive news is the non-recurrence of bad news last year, which was the balance sheet evaluation because of exchange rate movements. I'm sorry, your second question is about interest?

Yes, the net interest in term of market value adjustments that offset that.

A couple of things. One, our interest has gone up because we have got the VEBA debt in our books compared to last year and the second element is our fair amount of market value adjustment for our investment in Mazda has done down. Last year June, the quarter was going up and this year during the quarter it was going down. So, the year-over-year looks somewhat exacerbated.

On the exchange side, should we expect similar benefit in the second half or is the exchange is going to be headwind there?

No, we did have a big chunk in second quarter last year. So we are not expecting it. Who knows what you will expect on exchange rates, but based on present planning assumption we don't expect a big item like this in the second half.

So just the Europe and Russia, okay, and can you talk about Europe in the second half? Pricing is getting tougher. Production is going to be down. Can you stay profitable in Europe or any sort of color on that?

We are not giving guidance. I think you can see that we're going to run the business to be profitable. If we have to yield a little bit of market share to not do business if unprofitable we will do that. I mean that we will give you performance report as we go along.

Just one last one, I guess there is a lot of news around the funding asset-backed funding for Ford Credit. Is that change in your policy? How you're going to fund that business, or do you think that will be a timing issue?

A couple of things, first of all, we have credit company well funded and very diversified funding strategy for the credit company, and last night we did get a No-Action Letter from the SEC, I think will give us some solutions for the next six months to enable us to going to the public asset-backed market.

Clearly that was an un-intending consequence of the new legislation and so we're very, very confident that they'll get that straightened out quickly.

There's a lot of [NOC] from everybody to find a solution and we were very pleased with last night.

Your next question comes from the line of Rod Lache with Deutsche Bank.

First, I just want to talk a little bit more about this 11% margin that you achieved in North America. I know a few analysts have asked about whether there were unusual exchange items or warranty items in there. I guess just more broadly, were there any unusual items in there. Was mix unusually strong, any thoughts about the sustainability of the business? Obviously, you do have some cost coming in, but there is a lot of operating leverage in the business as the cycle recovers.

Rod, I think the only unusual thing is looking at the margins by quarter are quite dangerous because second quarter is a very full production quarter typically. So, we don't expect to say at in 11% margin, but we look at its more instructive I think to look at it on an annual basis and see the trends there rather than, there is a lot of noise, quarter-to-quarter that isn't signaled.

Getting out of the seasonality effects, as you well know.

Right, and the cost, obviously would be coming up as the market recovers. I haven't seen the numbers on Ford Credit yet, but I did see the year-over-year variances in the credit loss provisions. Can you just tell us what those provisions were in the quarter? Was that a negative number this quarter?

I'll ask K.R. to answer that.

Yes, actually it was an improvement. The credit loss themselves were about $86 million. The reserve adjustment was a reduction of $252 million and then there is a little bit of exchange in securitization going through as well.

So the expense item was a negative $252 million, is that, am I hearing you correctly?

Sorry, the credit losses themselves were $86 million expense and then the changing reserve was $252 million reduction in the reserves.

Okay, and just lastly, there was a lot of discussion I guess over the past couple of days about the opportunity and leasing part of it because of what's been happening in the residuals and partly also with AmeriCredit in the news yesterday. I'm just curios about what is your penetration of leasing at the moment? The industry looks like its around 21% lease. Is that something that you are viewing as an opportunity right now?

We don't share our penetration and we have been out of the leasing business, we continue to satisfy the customers, who want leasing.

Your next question comes from the line of Itay Michaeli with Citi.

Two questions on the 2011 outlook. Can you maybe directionally share what you are assuming there for net pricing year-over-year and also interesting to see that you expect continued cost structure improvements? Does that mean that the automotive structural cost just don't increase with the same rate that we maybe saw increase this year, maybe do you have any color on that?

With respect to your first question, we are pretty much aligned on the GDP growth the projections that people are making. The US just updated their guidance to 3 and 3.5 for 2010 and then moving to closer to 4 maybe in 2011. So, with that and the industry moving along with that and are increasing position on share that outlines the still to slow growth with respect to past recession, but clearly running positive thing that we are growing. On the pricing itself our real plan is to continue to offer the quality, the fuel efficiency and the safety and the smart design that people really do want and value. So, we anticipate that the consumers like they are now really appreciate and resonate with the new product line as we continue to refresh our vehicles to get to the freshest product line. We anticipate that the customers will continue to appreciate the Ford and pay for the features they really like.

It's too early for us to give detail views of next year. We would expect the pricing component probably to be some more less than it has been this year and we continue to work on our cost competitiveness.

On the net debt guidance for the year, obviously, impressive outlook there. Lewis, can you maybe help us directionally of where you think net debt could end 2010, just want to get better sense of some of the seasonal cash flow that you are expecting in the second half of this year?

What a great question. Somewhere between 5.4 and zero. I'm not going to tell you what the intersection point is.

We'll try to do math ourselves. Thanks a lot guys.

Just a reminder that we still have about somewhere between $300 million and $350 million of (inaudible) that we previously declared. The rest of the net debt, this year we are certainly expected to be doing whatever we do to continued great performance of the operating business.

Sure. Absolutely.

Ladies and gentlemen, at this time, we will now welcome questions from the media community. (Operator Instructions). Your next question comes from the line of Dee-Ann Durbin with The Associated Press.

As Lewis said, you're a company that's going into to a growth period, and I'm wondering if you plan to hire any new employees or if you feel that your staff is at this point the appropriate size?

Dee-Ann, we absolutely look forward to that point, because that clearly will show that we reflect in our growth. In the near-term, we are about where we need to be and we are continuing to work our productivity, and it really is going to depend on how fast the economy comes back and industry comes back, but we are in a good position right now, but we look forward to that day.

Also, Lewis, could you give the total quarterly incentive spending from last year. You said it was up this year, but how much? Up from the 300 million?

Hold on. I think we are confusing some numbers here. Just ask me the question again, Dee-Ann?

The total quarterly incentive spending? You gave the 300 million figure for the quarter?

I don't recognize the 300. That's euro. Our total incentive spending was down $200 million for the corporation.

Down 200?

We wouldn't give out the absolute.

Okay. So you were down?

We were down $200 million for the corporation within Europe, because of the absolute high level of incentive spending. Europe is up for the year by 300.

Your next question comes from the line of Keith Naughton with Bloomberg.

I am wondering if you could tell me what discontinuing Mercury will cost.

Well, we've been pretty clear in the specials. We say it will be, but the amount was showed in the specials which includes not just Mercury, but includes some other data restructuring. The amount we show here is somewhat less than half the total amount we expect to book in 2010 and 2011. We are not being any more explicit in this case.

Then conversely, how much more are you planning to invest in Lincoln?

Well, we are investing in Lincoln what it takes to deliver the product programs. You will see that we don't split out our CapEx and our engineering by brand, but you see this year our CapEx going up year-over-year and you will see us continue to increase our CapEx as we go into this growth period, and we've got this plan for seven new or refreshed products in the next four years.

The investment for all of that is in the guidance for '10 and '11 also, Keith?

Just to reflect on Mercury that the on place. We are having very fruitful discussions with our dealers and I think we have about 1,700 dealers involved and I think we already have signed agreements with about 700 of them.

Have there been any lawsuits?

No.

(Operations instructions) Your next question comes from the line of Brent Snavely with Detroit Free Press.

I wanted to see if you could talk a little bit more about going from the net debt to the net cash position some time next year, and how you are doing that? How significant that is for the business?

It's clearly really positive development, because we are managing on uses of cash, and we are looking at the overall business environment, and it appears to us with all of our fundamental assumptions that we are going to be able to continue to improve the balance sheet and pay down the debt and that's why we are very pleased to give the guidance that we'll be in a net positive position in cash at the end of next year.

Brent, I misspoke a little bit early when I talked about the operating divisions and exclusively call out. Obviously the dividends from Ford Credit are big help to continue to pay down our net debt. So it's both, the automotive business units and the Ford Credit.

Then I also saw unemployment, it looked like North American workforce increased by about 2,000 people from the first quarter to the second quarter. So can you talk about that? Are you guys hiring, plan to continue hiring?

Yes. That really reflects adding the Explorer to Chicago, where we're going to add 1,200 new jobs and also. That's all. I think that's enough for now.

That wouldn't happen until later on this year.

Right, and Mexico.

Yes. It includes some hiring for the Fiesta in Mexico?

Your next question comes from the line of Bernie Woodall with Reuters.

You just mentioned the Fiesta, but where are you with the launch of the Fiesta in North America, and have you run into any glitches?

No, we're up to a really good start and the acceptance by the consumers is fantastic. The dealers want more as fast as they can get them.

We had a very slight transportation glitch with some damage to some rare lines but other than that, we are on track.

Where was this transportation glitch, Mr. Booth?

I don't know. I am not the real expert. It was, I think, in the Mexico side of the border.

But all okay on the production side?

We are okay on the production side.

Absolutely.

The cars looks great actually.

Ladies and gentlemen, at this time we have no further questions in queue. I would now like to turn the call over to management for closing remarks.

Okay. Thank you very much, [Tuwanda]. I guess that concludes today's presentation. We would like to thank all of you for joining us here today.

Thank you for joining today's conference. That concludes the presentation. You may now disconnect and have a wonderful day.