Chief Executive Alan Mulally said Monday that the automaker is “really in very good shape against our plan” and reiterated that the auto maker expects to turn a profit in the U.S. in 2009.

Mulally, speaking with reporters during an event to commemorate the launch of the 2008 Ford Focus, said he expects 2008 U.S. auto industry sales of between 16.3 million and 16.5 million light vehicles. That would be up from the sales figure of around 16 million that analysts expect for 2007.

“We’ve laid out our plans to handle that kind of volume,” he said. Ford is trying to turn around its North American operations by matching its capacity to market share.

Mulally said that the recent interest rate cut by the Federal Reserve and an overall strong economy give him reasons for optimism.

Ford is trying to stanch loses in its North American business and is looking to stabilize its retail market share. The auto maker lost $12 billion last year and has seen its market share in the U.S. continue to decline in recent months.
The automaker also is heading into the final stretch in its talks with the United Auto Workers on a new labor contract. General Motors Corp. (GM) workers recently ratified a new deal with the UAW and Chrysler LLC reached a tentative agreement with the union.

Mulally wouldn’t comment on the talks, but noted that each of the Big Three are in different places, and that could factor into the talks. “Each of us are in different places, so that will be a consideration in our negotiations,” he said.
Analysts have said that Ford, arguably the weakest of the three domestic auto makers financially, may need deeper concessions from the UAW.

UAW Vice President Bob King, who leads the union’s talks with Ford, said that he’s noticed a difference at Ford under the direction of Alan Mulally, who became chief executive about a year ago.

King, speaking to reporters after the Focus event, said Ford, under Mulally, is “listening to our membership more.” He added that Ford’s hiring of former Toyota Motor Corp. ™ marketing executive Jim Farley is a “big home run.” During the formal presentation, King said the union has had qualms with Ford management over things such as product, marketing and launches, but that “since Alan Mulally has been at Ford, I’ve seen a real difference.”

Mulally said he hopes the 2008 Ford Focus gives Ford some more market share in the increasingly important small-car segment, after the auto maker had focused on pickup trucks and SUVs for years.

Mulally said he wishes Ford had a B-car, or subcompact, for the U.S. market and that he is working on bringing one here - based on the model shown at the Frankfurt Motor Show - as soon as possible.

Still, he said the 2008 Focus, which has been significantly redesigned, should help Ford in the small-car segment, which is becoming a bigger part of the U.S. market as fuel prices continue to rise.

Ford also hopes the car helps it lure younger buyers to the Ford brand.
Asked if Ford’s Mercury brand has a future, Mulally said, “absolutely.”

Ford shares were down 16 cents, or 1.7%, at $9.04 in recent trading, in line with a broader downturn on Wall Street.

-By Terry Kosdrosky, Dow Jones Newswires; terry.kosdrosky@dowjones.com
(Mike Spector of The Wall Street Journal contributed to this article)