When General Motors and Chrysler took government loans to stay in business, the two Detroit automakers had to agree to meet a number of restructuring targets. Since Ford had enough cash and credit to sustain itself, it didn't have to comply with any of those same targets, but that isn't stopping the Blue Oval from taking the necessary steps to stay out of the bread line.

Ford is looking to get $10.4 billion in long term debt off of its books, and the price of admission will be steep. Ford will pay a $80 premium per $1,000 to debt holders willing to convert senior convertible notes to common stock in the company. If Ford hits its target, it will reduce its outstanding debt from $25.8 billion to $15.4 billion, which would greatly reduce the amount of money lost to interest paid on that debt. Ford also recently came to an agreement to exchange half of the $13 billion owed to the UAW to cover health insurance, further reducing the amount of cash the automaker will need to dole out in the future.

With a bad economy taking its toll on sales, Ford needs to turn over every stone it can find to stem losses. The alternative is getting in line behind its cross-town competitors for some government-issue cheese.

[Source: Automotive News, sub. req'd | Photo by Bill Pugliano/Getty]

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