Ford Unburdens $4 Billion in Debt

June 30, 2010
The bulk of Ford's action comes from retiring $3.8 billion of debt, ahead of schedule, to the United Auto Workers Retiree Medical Benefits Trust.

Ford, which returned to the black in 2009, said it made the decision "to further strengthen its balance sheet as it gains momentum on its (strategic plan) and remains on track to deliver solid profits and positive automotive operating-related cash flow this year."

The bulk of Ford's action comes from retiring $3.8 billion of debt, ahead of schedule, to the United Auto Workers Retiree Medical Benefits Trust.

The automaker said in total, combined with an April debt payment of three billion dollars, it will have reduced its debt by more than seven billion dollars by the second quarter -- a move that will save the company $470 million in annual interest expense.

"We are pleased to make these payments ahead of schedule for the benefit of Ford and our UAW-Ford retirees who count on the Trust for their health care benefits," said Ford CEO Alan Mulally.

"We expect to continue to improve our balance sheet as we deliver on our plan," he said.

The iconic U.S. automaker shed tens of thousands of jobs and closed plants last year in an effort to cut costs, and sold off the bulk of its luxury European brands, including Jaguar and Aston Martin.

The number two U.S. automaker showed a profit in 2009 of $2.7 billion, rebounding after years of painful restructuring and bleeding balance sheets. Ford lost a $14.76 billion in 2008.

Copyright Agence France-Presse, 2010

Popular Sponsored Recommendations

Empowering the Modern Workforce: The Power of Connected Worker Technologies

March 1, 2024
Explore real-world strategies to boost worker safety, collaboration, training, and productivity in manufacturing. Emphasizing Industry 4.0, we'll discuss digitalization and automation...

3 Best Practices to Create a Product-Centric Competitive Advantage with PRO.FILE PLM

Jan. 25, 2024
Gain insight on best practices and strategies you need to accelerate engineering change management and reduce time to market. Register now for your opportunity to accelerate your...

Transformative Capabilities for XaaS Models in Manufacturing

Feb. 14, 2024
The manufacturing sector is undergoing a pivotal shift toward "servitization," or enhancing product offerings with services and embracing a subscription model. This transition...

Shifting Your Business from Products to Service-Based Business Models: Generating Predictable Revenues

Oct. 27, 2023
Executive summary on a recent IndustryWeek-hosted webinar sponsored by SAP

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!