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Ford CEO Alan Mulally live at D8

AllThingsD's Walt Mossberg and Kara Swisher talk to the Ford CEO about what kinds of technologies are safe to incorporate into cars, where electric cars still need work, and why modern cars are "digitally ignorant."

Ford CEO Alan Mulally has come to D8 to take the hot seat, a position he should be used to after steering Ford through the recent financial crisis. Ford shunned the bailout money that carried GM through a restructuring and sustained Chrysler through its sale to Italian automaker Fiat.

Ford recently released Sync, a voice-activation package on some models that integrates the content and functionality of mobile devices with the car itself. Sync also adds apps to the car, though it's not clear what these features will mean for the future of American automakers.

Live blog

All Things D's Walt Mossberg (left) and Kara Swisher (center), interview Ford CEO Alan Mulally. Asa Mathat/All Things Digital

Mulally appears onstage wearing a very bright red vest. Vibrant!

At [All Things D's] Walt [Mossberg]'s request, Mulally shows off a piece of paper with handwritten notes that purport to explain Ford's interest in all things digital. Lots of computers are involved in the creation of your Taurus.

12:30 p.m.: [All Things D's] Kara [Swisher] wants to know why cars have been basically digitally ignorant for a long time. Walt: You open the door to you car and it's 1957 again. Why is that?

For the record, Mulally doesn't think you should text and drive.

He also wants you to keep your hands on the wheels and eyes on the road. So there's lots of digital stuff being built into dashboard and console. Like the Sync iPod/phone, etc., manager.

Ford is playing around with features like allowing drivers to have their text messages read to them. But safety is paramount. All of our data says your safest operation is when you have your hands on the wheel and eyes on the road. Right now, we feel that listening to e-mail and text is a good first step. But we don't want you sending e-mail and text via voice, at least for now.

12:35 p.m.: Kara--Why is this taking so long? [i.e., "where is my jetpack?"]

Walt: Yeah! Even fancy German and Japanese cars don't do it well. It's pathetic!

Mulally: Don't blame me! I just got here. Part of the problem is that car development is much slower than consumer electronics' R&D cycle. For instance, a lot of competitors have embedded a phone in the car. We're avoiding that and focusing on interface, so as consumers exchange and swap devices, they can do that.

12:38 p.m.: A pitch for "My Ford Touch," which seems to have lots of bells and whistles, but sounds confusing to this frequent walker and subway-taker.

12:39 p.m.: Walt tries explaining it. "The instrument cluster, which has been on steering wheels forever, is now going to be on a screen."

Mulally: Right. We want to make it intuitive. Etc.

12:40 p.m.: Still trying to explain it. Screen goes on steering wheel and allows customizable controls for operating car, as well as extras.

12:41 p.m.: Kara--what is it that people want to do, anyway?

Mulally: Good question. We watch what people do in cars and try to help them do it, because they're going to do it anyway. For instance, we're building in Pandora to our cars. You'll get the music via the Web, from your cell phone, but you'll operate it on our panel. Also Stitcher, Open Beak, etc.

A lot of people here are using apps. You'll get to use them in the car.

12:43 p.m.: Walt--Will you need a special Ford version of these apps?

Mulally: Yep. You use our API.

12:44 p.m.: Kara wants better navigation services. She doesn't want to hear a mean German lady giving her directions, though.

Walt: Yeah! All of your GPS systems are lousy! The ones on phones are better!

Mulally: We're with you. That's why we want to rely on developers to build the good stuff, via our API.

12:47 p.m.: Let's talk about the car industry, period. You just got here. You were in aerospace, before. Also, the whole oil spill thing does change the way we look at cars, right?

Mulally: Before I left Boeing, I thought about where the car industry was going. What I decided was that the industry is the soul of Manufacturing--"big M"--all around the world. Lots of stuff goes into this, no matter what country or region. It's also part of the solution to economic growth, energy independence, and environmental sustainability.

On that note: Clearly, the internal combustion engine is going to be around for a while. But we can make them operate more efficiently, etc. Take a v6 and make it run like a v8m, etc. Meanwhile, hybrids are tough because you have two different systems: batteries and internal combustion. Then in the future, we need to move to all-electric. We have a great road map for all of this. First all-electric cars launch this year. Hydrogen is farther out, don't have the tech for it yet.

12:52 p.m.: Mulally describes challenges of the electric car: [manufacturers] need to figure out how and where to get the juice to cars.

12:53 p.m.: Kara--What about health of business?

Mulally: I like being here much better than testifying in front of Congress.

Kara: How did you get here?

Mulally: I flew! That's why we have airplanes. For long-distance travel.

12:53 p.m.: A Zuckerberg hoodie joke.

12:54 p.m.: Mulally--Time goes fast. Last year, I was testifying on behalf my competitors, who were bankrupt. Now I'm a capitalist. But if GM and Chrysler went away, they'd take the supply base along with them, and they'd probably have put the U.S. into a bona fide depression.

I was asking for temporary help. I didn't think all of us would end up owning our competitors.

12:57 p.m.: Mulally--Recovery is coming, by the way. We'll have 3.5 percent expansion of GDP this year. And Ford is doing well. We'll have market share increases.

Kara: What kind of car do you drive?

Mulally: A different one every night.


Alan Mulally
Ford CEO Alan Mulally at D8. Asa Mathat/All Things Digital

[I hope someone asks about The New York Times series that said that anything you do in your car besides driving is a safety risk. Anyone?]

Q: Please talk about the Mercury situation.
Mulally: We had too many brands. Ford, Mercury, and Lincoln. Mercury was supposed to be a gap-bridger between Ford and Lincoln. But the Ford line expanded, so we didn't need Mercury. "Everybody's got great options in Ford." It's also good news for Lincoln because we don't have other premium brands anymore, we'll refocus on Lincoln for luxury.

Q: Proud Tesla owner Jason Calacanis wants to know why electric isn't everywhere already.
Mulally: We can make electric cars, but as you know, we can improve them, like battery life.

Calacanis: No. It's not a problem. Batteries are great at Tesla.

Mulally: Nope. Most of them are too big, too heavy. There's a lot of room to improve the batteries.

Other point is that the infrastructure has to get there. You need charging stations for people in apartments, in rural areas, etc. When we get there, Ford will be there.

Kara and Walt want Jason to tell us how much his Tesla cost. Astonishingly, he goes mute.

Q: Did you really say you don't intend to get a revenue stream from connectivity of cars to data? You don't want a piece of money made by Yelp, Garmin, etc.?
Mulally: You heard me correctly. We're laser-focused on safe and efficient transportation. So there's no conflict of interest.

Q: Walt wants to know if these electronics actually sell cars.
Mulally: I demoed this stuff for you, and you're a tough critic, and you said "whoa!" This technology is absolutely a differentiator.

Q: You're talking about innovation in cars. Does dealer network have to change too?
Mulally: Absolutely. We've been right-sizing the dealer network to match demand for five years. Once you do that, throughput goes up, profitability goes up, interest in improving facilities goes up, etc. Then we can improve consumer experience.

Walt: Because it's terrible right now.

Mulally agrees without saying so.

Q: China is pushing hard for electric cars. What does that mean for you?
Mulally: I think China is going to continue to take a real leadership position on this. Big population, and they have a chance to really make a difference and maybe leapfrog the past.

Q: There's that great Ford quote about not listening to his customers, because if he did he'd be in the horse business. So how you do innovate?
Mulally: Stay close to innovation. And have a point of view about how the industry is going to progress.

Q: Ah! Someone asked about focusing while you drive.
Mulally: Eighty percent of accidents involve taking your eyes off the road. So we're convinced that the mind has the cognitive ability to do other things while driving as long as you continue to watch the road. So we minimize anything that's a distraction: keyboard, certain confusing apps, etc. We are definitely going to be a gatekeeper with regard to apps because it's crucial that you not be distracted.

We're done! Thanks for sticking around. See you in a year!

A note about our coverage: This live blog is not an official transcript of the conversation that occurred onstage. Rather, it is a compilation of quotes, paraphrased statements and ad-lib observations written and posted to the Web as quickly as possible. It is not intended as a transcript and should not be interpreted as one.