DETROIT (Reuters)--Ford Motor Co said on Monday it had taken on about $7 billion in new debt as part of a previously negotiated settlement that shifts responsibility for paying for retiree health care to a new trust fund controlled by the United Auto Workers union.

Ford said it had made scheduled payments of just over $2 billion and had opted to make an additional, early payment of $500 million on debt owed to the UAW's voluntary employees’ beneficiary association trust.

The VEBA trust was established as part of a sweeping 2007 agreement by Ford and other U.S. automakers to shift a combined $80 billion health care liability from their balance sheets.

In exchange for settling that debt, General Motors Co., Ford and Chrysler collectively pledged about $48 billion to the union-aligned trust fund, which would cover up to 675,000 retirees and dependents.

In 2009, as financial problems for the industry deepened, the UAW agreed to allow the three automakers to settle up to 50% of payments due to the VEBA in stock. Previously, all payments had been due in cash.

Ford said it opted to make a scheduled payment of $610 million to the VEBA in cash, instead of stock, on Dec. 31.

"We have removed a substantial health care liability from our balance sheet and have significantly reduced health care expenses," Ford Chief Financial Officer Lewis Booth said in a statement.

"We also have shown confidence in our liquidity ... by prepaying $500 million of debt owed to the VEBA trust."

In completing its payout to the UAW fund, Ford gave the trust two secured notes worth $13.2 billion and transferred cash and other securities worth just over $4.1 billion.

The No. 2 U.S. automaker also transferred warrants to purchase 362 million shares of Ford common stock at a price of $9.20 to the VEBA.

With Ford shares trading near $10.20 on Monday, those warrants are in-the-money, and the UAW fund could opt to exercise the warrant at any time, a Ford spokesman said.

General Motors and Chrysler, which both went through U.S. government-funded bankruptcies, were required to make similar settlements as of the end of 2009 under their parallel agreements with the UAW.

In return for sweeping concessions on retiree health care , the VEBA funds also got 17.5% ownership of GM and 55% of Chrysler.

The VEBA funds will be able to sell the stock in GM and Chrysler after the automakers have an initial public offering. GM has said it wants to register its stock in the second half of 2010.