The Ford Motor Co. has announced financial moves that have successfully reduced its debt by 38 percent or approximately $9.9 billion. The company's annual expenses for cash interest will fall by more than $500 million.

At the end of 2008, Ford's debt stood at $25.8 billion. The company will use $2.4 billion in cash and 468 million shares of common stock to reduce that figure.

The automaker has reached an agreement with the United Autoworkers Union to cuts its cash payments for retiree health care. Ford is the only American automaker not operating with an infusion of federal funds and is making significant strides in restructuring to survive the industry downturn.

"By substantially reducing our debt, Ford is taking another step toward creating an exciting, viable enterprise," said Ford CEO Alan Mulally in a statement. "As with our recent agreements with the UAW, Ford continues to lead the industry in taking the decisive actions necessary to weather the current downturn and deliver long-term profitable growth."

Using its finance arm, Ford Motor Credit, the company used $1 billion in cash to buy $2.2 billion in debt at 47 cents on the dollar and $1.1 billion to buy $3.4 billion in unsecured notes. Additionally, $4.3 billion of Ford's 4.25 percent senior convertible notes were tendered in the closing of a debt restructuring offer on April 3. Some $344 million will go toward a cash premium to the noteholders who tendered.