Ford has made faster progress than expected in cutting costs as part of an extensive revamping, president and chief operating officer Nick Scheele said yesterday, according to Associated Press (AP).

While visiting the Louisville assembly plant to drive the five millionth Explorer off the line, Scheele told AP that Ford is about 20% ahead of its target to reduce costs by an average of $US200 a vehicle this year.

AP said that Ford, which reported losses of $5.45 billion last year, has set a goal of cutting costs by an average $700 a vehicle by 2005. In January, the company announced a restructuring plan that called for the elimination of 35,000 jobs and five plants.

Scheele told AP that the better-than-expected savings did not mean the ultimate goal would be met sooner.

"It means we have a long way to go, a very long way to go, and we will keep plugging away," he told AP. "I wouldn't characterise it as, `Eureka,' or, `We've got it licked,' but we are better off than we could have been."

Scheele told AP that only a couple of months ago, the company was not optimistic about meeting its savings goal. He credited engineering and redesign changes for the savings, not any elimination of features, AP added.