Ford Slashes Debt, Stays Ahead of GM and Chrysler

Ford, the only of the Big Three automakers to so far refuse government bailout money, said this morning that it has slashed the debt in its automotive division, enabling it to save $500 million per year in interest expense.

Ford used $2.4 billion in cash and 468 million shares of its common stock to buy down $9.9 billion in debt, reducing its leverage by 38 percent.

"By substantially reducing our debt, Ford is taking another step toward creating an exciting, viable enterprise," Ford chief executive Alan Mulally said in a statement.

Ford has so far been spared the wrath of the federal government and the administration's automotive restructuring team, headed by former investment banker Steve Rattner. The White House ousted GM chief executive Rick Wagoner last week.

Last Wednesday, Ford reported that March vehicle sales were down 40.9 percent compared with March 2008, which beat forecasters' expectation of a 45 percent plunge for Ford.

Ford sales were up 30 percent compared with February of this year.

As recently as first quarter 2008, Ford was profitable.

-- Frank Ahrens

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