Chalk up another win and resume point for Alan Mulally. Ford Motor Company has announced today that they have cut their automotive debt by $9.9 billion, which translates to 38%. By the end of 2008, Ford's automotive debt exceeded $25.8 billion even after shedding Land Rover and Jaguar to Tata Motors in the spring. Ford has been on a no-holds-barred attempt since Muially took the helm as CEO over two years ago to reduce debt, match customer demands, and increase innovation and quality across all Ford vehicles.
In order to further reduce debt, Ford has reached a new agreement with the United Auto Workers (UAW) for salary and retirement packages. It also used substantial amounts of cash and common stock to reduce debt.
Mulally expressed confidence and optimism in a prepared statement announcing the financial health of the company. "By substantially reducing our debt, Ford is taking another step toward creating an exciting, viable enterprise. As with our recent agreements with the UAW, Ford continues to lead the industry in taking the decisive actions necessary to weather the current downturn and deliver long-term profitable growth.
Hopefully the reduction in debt and capital gain from the upcoming sale of Volvo will prevent Ford from seeking federal funds to recover the economic downturn.
Source: Leftlane News
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Congratulations to Ford and they are well on their way to a positive recovery...we hope!