Ford Motor Company, the world’s second largest vehicle manufacturer, has announced that it is 20% ahead of schedule in its cost-cutting exercise.

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This is a significant step in the rehabilitation of the car manufacturer that posted significant losses last year.


Ford has been dogged by problems over the last few years. Negative publicity due to the Ford Explorer/Firestone tyres issue, boardroom changes and falling new car sales have all had a significant impact on the company.


However, recent news suggests that the company is moving in the right direction. Last week, Ford raised its estimates for Q3 earnings from a projected loss to a small profit.


The reason for Ford’s turnaround is the implementation of its ambitious restructuring plan, which aims to cut costs by $US9 billion and lead to the generation of $7 billion in profit by 2005. The company has already shaved $240 per vehicle from its production costs and by 2005 its aim is to reach a figure of $700 per vehicle.

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While the signs are positive, Ford’s targets are ambitious and its recovery is still a fair challenge. The company is likely to make further staff reductions in the future to achieve its intended aim, and will need to continue keeping a close eye on its cost structures across its operations.


For the time being though, the company seems to be on track.


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