Ford said it would offer holders of its Motor Company Capital Trust II preferred securities stock or cash by 15 March, reducing debt by about US$3bn.

The company said the move would lower annual interest costs by about $190m but would book a 2011 first quarter charge of up to $60m.

“We remain focused on reducing our automotive debt as the core automotive business continues to strengthen,” said CFO Lewis Booth. “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.”

Ford reduced debt by $14.5bn in 2010.

The automaker borrowed around $23bn in late 2006 as then-new CEO Alan Mulally began a restructuring plan. Unlike, Detroit rivals GM and Chrysler, it did not seek federal bailout funding after the 2008 credit crunch.

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