DEARBORN, Mich. -- Ford Motor Co. has announced that on March 15, all of the outstanding 6.5 percent Cumulative Convertible Trust Preferred Securities of its subsidiary trust, Ford Motor Co. Capital Trust II, will be redeemed for cash at a redemption price of $50.33 per trust preferred security, plus accrued and unpaid distributions of $0.5416667 per trust preferred security.

The redemption of the trust preferred securities will result from Ford redeeming for cash all of the $2.98 billion aggregate principal amount outstanding of its 6.5 percent Junior Subordinated Convertible Debentures held by Ford Motor Co. Capital Trust II, as Ford continues to aggressively strengthen its balance sheet.  

The company says redemption or conversion of these securities will result in a reduction of about $3 billion in Automotive debt and lower annualized interest costs of about $190 million. Redemption of these securities will also result in a 2011 first quarter charge of up to about $60 million.

"We remain focused on reducing our Automotive debt as the core automotive business continues to strengthen," said Lewis Booth, Ford executive vice president and CFO. "We are pleased with the progress we have made, and we are committed to continuing to improve our balance sheet to lay a solid foundation for a strong and profitably growing business in years to come."

The actions announced today are in addition to the $14.5 billion total reduction of net Automotive debt Ford achieved in 2010.