Ford is aiming to slash its $US30 billion in non-product expenses by a fifth over the next two years, the Detroit News said on Monday.
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Citing Ford officials, the newspaper said the financially troubled car maker has assigned nine teams to deliver cost reductions of 20% in areas including marketing, sales and service; information technology; transportation and freight; and machinery and tools.
Ford is under increasing pressure from investors to accelerate its turnaround plan at a time when the war with Iraq and a weak economy have sapped the US new vehicle market, the Detroit News said.
The newspaper said that, by targeting so-called non-production costs, Ford is examining almost every expenditure — from computer systems and drill bits to the coveralls and eye protection worn by assembly line workers.
If successful, the Detroit News added, Ford stands to shear $6 billion in excess costs and significantly boost its bottom line but also faces the delicate task of significantly reducing costs without delaying new car and truck models or sacrificing quality.
“We have told the teams to look for 20%,” Ford controller Don Leclair told the Detroit News in an interview. “Our intention is to accomplish this without damaging the fabric of the company.”
