agent Entrepreneur logo
MenuMENU
SearchSEARCH

Ford to Pay Off $1.8B of Debt

September 15, 2011
2 min to read


Ford Motor Co. will pay down $1.8 billion of its long-term debt today and continues to negotiate a new agreement with the United Auto Workers as precursors to restoring the investment grade status it lost in 2006.


"We've fixed the business fundamentals," Lewis Booth, Ford chief financial officer, said Wednesday at the UBS Frankfurt Auto Show Investor Conference. "The only real stumbling block is to get past the UAW negotiations successfully."

Ad Loading...


Ford's four-year contract expired at midnight but was extended to keep plants running as talks continue, reported The Detroit News.


The UAW wanted agreements with General Motors Co. and Chrysler Group LLC first.


Booth told investors he thinks economic uncertainty is also affecting an upgrade of Ford's credit rating.


"They think our financial metrics are working at investment grade now," he said, referring to Moody's Investors Services, which has Ford two notches below grade.


At the end of June, total debt was $14 billion. Ford is using its $22 billion in cash reserves to retire the final $1.8 billion of a $7 billion long-term loan secured in 2006 and maturing at the end of 2013.

Ad Loading...


Automotive debt will be about $10 billion in 2015, far from the $33.6 billion at the end of 2009, Booth said.


"If cash continues to grow, we'll look at further shareholder actions," Booth said, without elaborating.


"Paying down the debt is a further sign of confidence in their business plan," said Charles Moore, senior managing director of Conway MacKenzie Inc. in Birmingham.


"When companies are nervous, they have a hard time parting with cash," he said.


In other projections, Booth said revenue and pricing will improve and capital spending will increase $500,000 to $6 billion.

Ad Loading...


Booth said the automaker will cut costs and respond accordingly if the economy experiences significant downturns.


But the company is leaner and better able to weather turmoil.


"Our balance sheet is a lot cleaner than two years ago."

More Industry

The outside of a blue Gregg Young Chevrolet dealership.
Industry•by Lauren Lawrence•October 22, 2026

Nebraska Rooftop Changes Hands

The Gregg Young Automotive Group has sold its second dealership to Janssen Auto Group, both in Plattsmouth, Neb.

Read More →
Two white men's shaking hands
Industry•October 15, 2026

Penske Auto Group Deal a Record

The deal to take the dealership and transportation services company private sets a new pace for industry buy-sell transactions.

Read More →
Rows of cars parked in exterior lot
Industry•by Hannah Mitchell•October 8, 2026

War Toll a Damper on Used Auto Prices

Cox Automotive found wholesale depreciation to be elevated in September amid high fuel prices and this year's unusual hurricane season.

Read More →
Ad Loading...
Mechanic cleaning interior of engine
Industry•by Lauren Lawrence•October 8, 2026

Bridge the Maintenance Gap

With many drivers missing recommended maintenance, service departments offering transparency and efficiency have a better chance of reaching financially strained consumers.

Read More →
Ford F-150 truck rounding a curve
Industry•by Hannah Mitchell•October 1, 2026

California Store Has New Owner

The longtime dealership in the northern part of the state is known for robust fleet sales and has served the state capital for 115 years.

Read More →
crane lowering a pipeline into the ground
Industry•by Lauren Lawrence•October 1, 2026

BMW Plant Pursues Cleaner Energy

BMW Group Plant Leipzig has utilized hydrogen to help power its production since 2013, but a new pipeline is planned to take it to another level.

Read More →
Ad Loading...
Two dodge cars outside of dealership.
Industry•by Lauren Lawrence•September 17, 2026

Auto Affordability Inches Up

The latest Cox Automotive and Moody’s Analytics index shows a slight increase in new-vehicle affordability despite high prices.

Read More →
Five men smiling for photo in front of Honda car dealership.
Industry•by Lauren Lawrence•September 10, 2026

Ohio Auto Group Under New Ownership

After 79 years with the Schluter family, Mansfield Auto Group has been acquired by Missouri-based Clement Auto Group.

Read More →
Blue and white RV parked on beach facing the ocean.
Industry•by Lauren Lawrence•September 3, 2026

RV Group Expands Carolina Footprint

Blue Compass RV Columbia Northeast is the 13th RV dealership owned by Blue Compass in the Carolinas.

Read More →
Ad Loading...
Photo of two men and one woman on a discussion panel
Industry•by Hannah Mitchell•September 1, 2026

Agent Acumen

An Agent Summit panel of people who’ve been supporting auto dealers for years gave both timely and timeless advice for those starting out or mulling the prospect.

Read More →
Ad Loading...