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

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