Ford slashes $4 billion in debt with union payment

Ford Motor Co. said Wednesday that it's slashing another $4 billion-plus in debt, mostly by paying cash to its union retiree trust ahead of schedule, in an attempt to shore up its balance sheet.

Shares of Ford rallied more than 3% in opening trades to $10.20.

Combined with an April payment of $3 billion, the auto maker has cut $7 billion in debt during the second quarter, which will lead to savings of more than $470 million in annual interest costs.

"We expect to continue to improve our balance sheet as we deliver on our plan," said Alan Mulally, Ford's chief executive officer. "Our business results make it possible to take these actions while still accelerating the investments we are making in our business to serve our customers with the very best cars and trucks."

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- Posted: 2010-06-30 09:38:35

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