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SAN FRANCISCO -- ChevronTexaco Corp., operator of more than 2,800 convenience stores nationwide, reported it expects to meet its previously announced goal of $1.8-billion in reduced operating expenses six months ahead of schedule. The company also said it is on pace to reach $2.2 billion in annual savings by April 2003.
"In the eight months since completing our merger, ChevronTexaco moved swiftly and successfully to integrate its businesses and to put in motion aggressive plans to enhance upstream performance and improve downstream returns," Chevron Chairman and Chief Executive David O'Reilly said in a presentation to security analysts.
In a related development, the company said Thursday it would lay off 100 employees from a credit card division in the San Francisco area, transferring the customer service positions to the Philippines.
Layoffs will come in November and December and are part of the plan to eliminate 4,500 jobs as part of the cost-cutting program
Commenting on the company's faster-than-expected corporate savings, Vice President and CFO John Watson said, "We have been able to identify additional synergy opportunities across all sectors of our business.
"By streamlining the organization, consolidating facilities, integrating systems, sharing best practices and leveraging global procurement opportunities, we've been able to surpass our initial targets and do so ahead of schedule. These synergies are making a positive impact on our bottom line."
Improving return on capital employed was a dominant theme in remarks by Patricia Woertz, executive vice president in charge of global refining and marketing.
"Our downstream business is global and positioned for stronger returns," Woertz said. "With strong brands and world-class refining and marketing networks, we've set a goal of sustaining a 12-percent return on capital employed in the U.S., and achieving by 2005, a 10-percent return on capital employed internationally. By integrating the legacy Chevron, Texaco and Caltex operations, we aim to capture $700 million in synergy savings by next year."