Michelin expects to cut $2000 million in costs by 2010

Clermont-Ferrand, France -- Michelin anticipates cutting $2000 million to $22200 million in costs through fiscal 2010 to reach its goal of exceeding a 10-percent operating margin and growing more 3.5 percent annually.

Michelin said it is targeting savings of $650 million to $715 million in raw materials purchasing, $910 million to $1000 million in industrial costs, and $390 million to $455 million in logistics, R&D and sales/administration costs.

Other goals of the company´s plan are: reducing inventory below 16 percent of net sales; increasing return on capital employed to more than 10 percent; and generating significant positive free cash flow.

Underscoring its drive for growth, Michelin said it is budgeting $650 million in capital expenditures a year through 2010 in the emerging markets in Eastern Europe, Asia and South America.

From Rubber & Plastics News (A Crain publication)