UAW trust fund to sell rights to rising Ford stock

[Omaha Steve]

Source: AP

By TOM KRISHER and DEE-ANN DURBIN

DETROIT (AP) - A trust fund set up by the United Auto Workers union is hoping to raise at least $1.3 billion to help pay retiree health care costs by selling rights to an 11 percent ownership stake in Ford Motor Co.

The trust will auction warrants to buy 362 million shares, which were issued in December 2009, starting at 8 a.m. Tuesday. The automaker and union agreed to set up the trust to help Ford remove retiree health care costs from its books while it was in financial trouble in 2007.

In January, the trust began paying health care costs for about 200,000 Ford blue-collar retirees and their spouses nationwide, and Ford said it is saving the company roughly $500 million per year.

The trust set a minimum price for each warrant at $3.50. Each warrant gives the holder the right to buy a Ford share at $9.20. At the minimum price, the trust would get $1.3 billion, $100 million more than the value Ford placed on the warrants in December.

Read more: http://apnews.excite.com/article/20100329/D9EOFFK81.html

[No Elephants]

1. I hope the auction brings a good price.