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June 30, 2010 8:30 AM, EDT

Ford to Make $4 Billion Debt Payment

Ford Motor Co. will make a $4 billion payment on its outstanding debt, paying into a United Auto Workers trust fund that pays retiree health care bills, the Associated Press reported Wednesday.

The automaker will also pay $255 million in dividends on preferred securities that had been deferred as it worked its way through financial troubles, AP said.

Ford said the payments are a sign of confidence that its restructuring plans are working and that the actions will reduce its debt to about $27 billion, down from $34 billion in debt at the end of March.

The company borrowed more than $23 billion to avoid bankruptcy and make it through the recession, but recently recorded sales gains and four straight quarterly profits, AP said.