Ford said it would reduce its debt by $4 billion by paying $3.8 billion in cash to the United Auto Workers retiree medical benefits trust, not only making scheduled debt payments but also paying off the remaining balance on an outstanding note. Additionally, the company will pay $255 million of previously deferred quarterly distributions on 6.5% cumulative trust preferred debt.
In mid-morning trading, Ford stock was up 47 cents to $10.35. The stock had dropped nine of the preceding 10 days. After starting the year at $10.17, Ford shares reached a 2010 high of $14.21 in mid-April. In 2009, Ford stock rose 335%.
"Our One Ford plan to profitably grow our business is working and we are increasingly confident about the future," said CEO Alan Mulally in a prepared statement. "We expect to continue to improve our balance sheet as we deliver on our plan. Importantly, 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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