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Ford ups stock offers to fund retiree trust

Posted Tuesday, May 12, 2009, 1:41 pm in Employee News

Ford Motor Co. is issuing another 300 million shares of common stock to raise cash to cover its payments to the UAW-run retiree health care trust, taking advantage of a big rise in the company’s stock price, The Detroit News reported.

The move comes as Ford’s stock hits levels not seen in months, the News reported. Last week, it closed above $6 a share for the first time since July. The automaker appears to be seizing the opportunity to raise additional cash, the paper said.

“Today’s equity offering is another example of the fast, decisive action we are taking as we build momentum on our plan, including further progress on improving our balance sheet,” CEO Alan Mulally said in a statement Monday. “We continue to make strong progress on our transformation plan, gaining retail market share with great new products, improving quality, reducing costs and positioning Ford for a return to profitability.”

According to the News and documents filed with the Securities and Exchange Commission, Ford intends to use the money raised through the sale “for general corporate purposes, including to fund a portion of the payments we are required to make to the VEBA,” referring to the voluntary employees’ beneficiary association that is assuming responsibility for its hourly retiree health care expenses, the story said. (The Detroit News)
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