Ford says it has cut auto division’s debt by a third

Ford, the only Big Three automaker to refuse government bailout money, said Monday that it had slashed the debt of its automotive division, enabling it to save $500 million a year in interest costs.

Ford used $2.4 billion in cash and 468 million shares of its common stock to buy down $9.9 billion in debt, reducing its leverage 38%.

“By substantially reducing our debt, Ford is taking another step toward creating an exciting, viable enterprise,” Ford Chief Executive Alan Mulally said in a statement.

Ford has been spared the wrath of the federal government and the administration’s automotive restructuring team.

The White House ousted GM Chief Executive Rick Wagoner last week.

Ford reported Wednesday that March vehicle sales were down 40.9% compared with March 2008.