Ford CEO Says Restructuring Is Ahead of Schedule
Ford Motor , the struggling No. 2 U.S. automaker, is moving ahead of its own schedule for reducing costs, including plant closures and job cuts, the automaker's chief executive said today.
"I would characterize that we are ahead of schedule on the restructuring," Ford Chief Executive Alan Mulally said in a presentation for financial analysts. ""Our number one priority is to restructure ourselves."
Ford, which lost $7 billion in the first nine months of 2006, is closing 16 plants and cutting nearly 45,000 jobs in a bid to return its North American automotive operations to profits.
Mulally, speaking to analysts at Ford's Dearborn, Michigan, headquarters in a presentation monitored by Webcast, said the company has "a solid plan now," which spans a five-year time frame.
"Our mantra inside Ford is profitable growth for all," he said.
The CEO, who was hired away from aircraft maker Boeing in September, said the biggest cost-cutting opportunity for the car company is to reduce the number of vehicle platforms it uses around the world and increase the number of shared parts.
Mulally said Ford has six or seven regional units with different product lines.
"We haven't chosen to leverage these global assets," Mulally said. "So you reduce the platforms, reduce the number of drivetrains and start putting on the exterior... that's tailored to the regions around the world," Mulally said.
Larger U.S. rival General Motors Corp. is also changing the way it engineers cars under product czar Bob Lutz in a bid to cut costs and says it is ahead on globalizing its operations.
Mulally said the automaker's recent borrowing program of over $23 billion had included a cash "cushion" to protect against "exogenous shocks."
Ford is set to spend $17 billion cash over the next three years in restructuring and its automotive operations.
Mulally said the company is still reviewing its global brand portfolio.
"We have not made any decisions but we are reviewing it," he said, when asked about a possible sale of if its money-losing Jaguar brand.