How they control cost: 23-July-08
Sourav Mitra -
Wednesday, July 23, 2008 7:25 PM
PSA Peugeot Citroen, Europe's second-biggest carmaker:
1. It has instituted a savings program to reduce overhead and fixed production costs by 30 percent by 2010
2. It cut 10,300 positions in western Europe last year, 80 percent of them in France
3. It will shorten vehicle development times
4. It improved quality to reduce guarantee costs
[Click here for full story at Bloomberg.com]
Determination to save costs + job cuts + time savings + improved quality = Cost savings
* * * * * * * * * *
Vodafone Group Plc, the world's largest mobile-phone company:
1. It will start a $2 billion stock buyback immediately because the shares are significantly undervalued.
2. It will pay a maximum of 105 percent of the average of the middle market closing price for the five business days preceding the date on which any shares are purchased.
[Click here for full story at Bloomberg.com]
Share buyback = lower cost of finance when there are inadequate avenues for profitable deployment of funds
* * * * * * * * * *
De Beers, the world's biggest diamond company:
It is reducing the amount of diamonds it buys from Alrosa after antitrust complaints by the European Union.
[For seven decades until 2000, De Beers bought and hoarded gems produced by rivals to control the prices at which it could sell them on to customers.]
[Click here for full story at Bloomberg.com]
Abiding by the law = lower legal costs