Ford's Cost-Cut Program Progressing, Savings Rise, Scheele Says
By Brian Lysaght
Manchester, England, Nov. 25 (Bloomberg) -- Ford Motor Co.'s cost-reduction program will generate savings of $300 a car this year, more than the world's second-largest carmaker had forecast, said Chief Operating Officer Nicholas Scheele.
``It's moving upwards,'' Scheele said in a Bloomberg Television interview. ``As you gain traction and move ahead you start to see results.'' The goal was to save $200 a car this year and in September Ford said the reductions had reached $240.
Ford is trying to recover from last year's loss of $5.45 billion. The cost reductions are part of a five-year recovery plan that includes eliminating jobs, closing plants and adding new models. Ford had a third-quarter loss of $326 million.
Its shares have declined 35 percent this year, second worst behind Fiat SpA among the world's carmaker.
Scheele said the reorganization program is ``on track,'' November U.S. car sales would be higher than in October and that fourth-quarter sales are ``coming in at a strong rate.''
The interview came before his speech at the Conference of British Industry convention in Manchester, England in which he said the U.K. needs to adopt the euro currency and abandon the pound as soon as possible.
Failing to do so would risk ``steady erosion'' at the automaker's British operations and other companies.
``We are slipping further and further behind,'' said Scheele in the speech, his strongest comments so far as a proponent of the euro. Changing to the euro would improve British living standards as the economy flourished because of increased trade and efficiency.
Scheele, the British-born No. 2 executive at the world's second- largest Automaker, was knighted by Queen Elizabeth II in 2001. Ford is the best-selling car brand in the U.K., with a market share of 16 percent. It closed its Dagenham car assembly plant near London and cut 2,000 jobs to cut costs.
By making cars in the U.K. and selling them in the 12 countries that use the euro, Ford's British operations pay the equivalent of a ``25 percent tax.'' The automaker also has assembly plants in Spain, Belgium and Germany that produce cars sold in the U.K.
``Every minute of delay in adopting the euro is detrimental to our employees, business partners'' and customers, he said.