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.
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By GlobalData“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.”
