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Federal-Mogul Project Prioritization and Funding

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Federal-Mogul initiated a prioritization process that would probably lead to the sales of its lighting business and perhaps other divisions. The auto supplier in Southfield, Michigan retained an external consultant to coordinate with potential buyers. The firm was classifying the divisions as non-core, core-maintain and core.

The firm will continue to provide customer support in the non-core and core-maintain divisions but will not invest significant capital.

The CEO Frank Macher stated: “We are allocating scarce resources to the core product lines.” Macher went on to say” "We have begun an extensive prioritization process to understand our product line strengths and advantages. Through this process, we will develop strategies to focus our scarce resources, people and capital on product lines where we have a competitive advantage and can grow at acceptable margins." (Meil, 2001).

Companies can learn from this example to engage in a process to evaluate its core and non-core businesses to fund and implement future projects. The key to a successful development plan is to prioritize the business segments need based on current and future revenue.

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YouSigma. (2008). “Federal-Mogul Project Prioritization and Funding." From http://www.yousigma.com.

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