Ford Transfers Retiree Health-Care Liabilities To Union Trust

Ford Motor Co. (F) said Monday it completed the transfer of its union retiree health-care liabilities to the United Auto Workers Retiree Medical Benefits Trust as part of a court-approved settlement agreement.

The transfer Thursday "is the culmination of several years of work and will significantly improve our competitiveness in the U.S.," said Chief Financial Officer Lewis Booth. The deal removed a substantial health-care liability from the Detroit auto maker's balance sheet and significantly reduced its health-care expenses.

The company also said Monday it prepaid $500 million of debt owed to the trust.

In a move to address rising retiree health-care costs, Ford along with Chrysler Group LLC and General Motors Co. reached a deal during 2007 contract negotiations to create the health-care trusts.

UAW President Ron Gettelfinger said in December that he hired Eric Henry to serve as chief investment officer to oversee the retiree trust funds created by the three auto makers. Henry is the former head of the Texas Municipal Retirement System Fund. During his two years there, he oversaw the $14 billion fund serving about 800 Texas cities.

Ford's shares recently traded at $10.20, up 2%, amid a broad market rally to kick off 2010. The stock has quadrupled in the past year.