CLERMONT-FERRAND, France (Feb. 15) — Michelin anticipates cutting $2 billion to $2.2 billion 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 $1 billion 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.