UPDATE 1-Ford to sell more stock to buy back debt

(Adds details on stock plans from prospectus, background)

DETROIT, Oct 2 (Reuters) - Ford Motor Co (F.N) said on Thursday that it would sell up to an additional $500 million of shares to buy back debt from its Ford Motor Credit Co LLC subsidiary, adding to a program it announced in August.

Ford, which posted a net loss of $8.7 billion in the second quarter, said in August it would sell up to $500 million in stock to buy back the debt as part of an overall plan to improve its balance sheet.

By Wednesday, Ford had issued 88.3 million shares totaling $434.5 million, it said in a filing with the U.S. Securities and Exchange Commission.

The additional debt buyback comes at a time when companies are facing more pressure to make efforts to reduce the debt on their balance sheets.

Ford has accelerated plans to restructure in North America, including converting some truck production to produce more fuel efficient cars and bringing over European-designed cars that are part of a global production strategy.

Earlier in 2008, Ford abandoned a long-standing goal of returning to profitability in 2009 as it has continued to struggle with market share losses in the United States.

Automakers are grappling with a three-year downturn in the U.S. auto sector, including a 15-year low in September, when Ford posted an unadjusted 34.6 percent drop in sales.

Ford Chief Executive Alan Mulally on Thursday said he expected no recovery in the global car market until 2010, noting that the industry sales downturn is deeper and longer than had been expected a year ago.

Ford ended the second quarter with a cash position of $26.6 billion, down $2.1 billion from the first quarter. Ford had about 2.17 billion shares of common stock and nearly 71 million shares of Class B stock as of May 1.

Goldman Sachs & Co (GS.N) is acting as sales agent. (Reporting by David Bailey, editing by Brad Dorfman and Bernard Orr)