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Ford Motor Co. says it lost $5.9 billion in the fourth quarter but it has no plans to seek federal aid unless economic conditions worsen.

The second-largest U.S. automaker says it burned through $5.5 billion in cash during the quarter.

The company said Thursday it lost $2.46 per share, compared with a loss of $2.8 billion, or $1.13 per share, for the year-ago period.

Excluding one-time items, Ford lost $1.37 per share. Analysts surveyed by Thomson Reuters expected a loss of $1.30 per share.

Revenue fell to $29.2 billion, down from $45.5 billion for the fourth quarter of 2007.

The Dearborn, Mich., company also announced that its credit arm would cut 20 percent of its work force, or 1,200 jobs, and it has reached agreement with the United Auto Workers Union to end the jobs bank in which laid-off workers get most of their pay.

, Ford Motor Chief Executive Alan Mulally sat shoulder-to-shoulder with the bosses of General Motors and Chrysler like a line of delinquent schoolboys.

But now that the Bush administration has agreed to lend GM and Chrysler $17.4 billion to stave off bankruptcy, Mulally is running as fast as he can from those other guys. "We're in a different place," says Mulally, whose company had $19 billion in cash on Sept. 30 and isn't seeking an immediate cash infusion.

Don't be so sure. Ford, which lost $8.7 billion through September, may yet need taxpayer money. It is burning more than $2 billion a month and has asked for a $9 billion line of credit as a safety net in case industry conditions worsen. And it's looking more and more like Ford will need it.

Ford's financial projections are based on a rosier industry sales forecast--12.5 million vehicles (including heavy trucks) in 2009 and 14.5 million in 2010--than most industry experts predict. JD Power & Associates is forecasting 11.4 million light-vehicle sales in 2009 and 13.6 million for 2010.

IHS Global Insight is even more pessimistic. It now forecasts sales of 10 million to 10.5 million light vehicles for 2009, and 12.5 million units for 2010. GM's best case scenario is 12 million units in 2009 and 14 million in 2010, though its business plan is based on more conservative estimates. Last year, the industry sold 16.1 million light vehicles.

If Ford's assumptions prove too optimistic--as is likely--it too will be approaching Uncle Sam for help. "All automakers, including Ford, are going to need government money," says IHS Global Insight analyst Rebecca Lindland.

Self-interest required Mulally to stand up for his weaker competitors. A collapse of one or both would hurt suppliers and could potentially bring down Ford as well. But in the meantime, Ford is shrewdly portraying itself as the healthiest U.S. carmaker and quietly stealing market share from its crosstown rivals. Ford gained 1.4 points of market share in November, while GM lost 1.6 points and Chrysler lost 2.3 points.\

Ford Motor is suffering from guilt by association. The automaker has $15 billion or so in the bank and billions more in credit lines, is not looking for a year-end bailout and still gets splashed with mud. Every day I hear the TV news people, the stars like CNBC's Maria Bartiromo, lump General Motors, Ford and Chrysler together as facing bankruptcy. In Ford's case, this is just not true.

Alan Mulally, the chief executive Ford imported from Boeing (nyse: BA - news - people ), has moved smartly since he gave up his wings. He mortgaged assets (for $24 billion) and signed up credit lines two years ago before all the current turbulence.

He also sold Jaguar, Land Rover, Aston Martin, some of Ford's Mazda (other-otc: MZDAF.PK - news - people ) stake and has put Volvo on the block. You can disagree or agree, maybe some of these operations could still have turned into winning assets, but Mulally decided Ford did not need the problems right now.

Unlike GM, Ford has no surplus car lines, which means it avoids both heavy spending to keep too big a lineup up-to-date and endless lectures from Wall Street know-it-alls who say to get rid of them. Excluding Volvo, which Ford hopes to sell, and Mazda Motor, in which it has only a minority stake, Ford has only two dealership channels in this country: Ford and Lincoln/Mercury.

Both Ford and GM are unlike Chrysler in that they have robust foreign operations. For Ford, Europe and South America earned $2.5 billion pre-tax in the first nine months this year. Those markets are slowing, yes, but they are strong businesses. Europe is providing the small-car knowledge and engineering that Ford needs in the U.S.

Yes, Ford has asked for a government-backed credit line, just in case the economic downturn gets much uglier, and is asking for some of the government cash that Congress already appropriated for updating plants and making fuel-saving vehicles. On the other hand, Ford is not begging for an immediate cash infusion to keep it afloat.

Long run, Ford has the ability to grow. For the past two months the Dearborn, Mich., manufacturer has held its own in share against the prior year, while the others slipped. The company even picked up share in November, to 16.4% of the industry sales versus 15.4% a year before. This is a good sign. If GM downsizes, Ford could end up bigger than GM in just a few years.

U.S. automakers plan to reopen their union contract and may sell Saab and Volvo to the Swedish government as a way to pare brands

Ford Motor Co. says it is considering selling Volvo Car Corp. as the struggling U.S. automaker seeks to raise cash and weather the industry crisis.

Ford said Monday it expects its strategic review of the Swedish luxury automaker will take several months.

The Swedish government has said it has been in talks with Volvo and with General Motors Corp. (nyse: GM - news - people )'s Saab unit following reports that the U.S. parent companies were seeking aid for their Swedish carmakers.

Ford, GM and Chrysler LLC will go before Congress on Tuesday to present a proposal for $25 billion in loans to keep them afloat as sales sag.

Ford shares are up 18 cents at $2.87 in morning trading.

Ford chief executive Alan Mullaly, with a Fusion Hybrid, a car that could be pivotal in the company's future pl

Many members of Congress believe they know what the car company of the future should look like.

"A business model based on gas -- a gas-guzzling past -- is unacceptable," Sen. Charles E. Schumer (D-N.Y.) said last week. "We need a business model based on cars of the future, and we already know what that future is: the plug-in hybrid electric car."

But the car company Schumer and other lawmakers envision for the future could turn out to be a money-losing operation, not part of a "sustainable U.S. auto industry" that President-elect Barack Obama and most members of Congress say they want to create.

That's because car manufacturers still haven't figured out how to produce hybrid and plug-in vehicles cheaply enough to make money on them. After a decade of relative success with its hybrid Prius, Toyota has sold about a million of the cars and is still widely believed by analysts to be losing money on each one sold. General Motors has touted plans for a plug-in hybrid vehicle called the Volt, but the costly battery will prevent it from turning a profit on the vehicle for several years, at least.

"In 10 years are they [at GM] going to solve the technological problems with respect to the Volt? Sure," says Maryann Keller, an automotive analyst and author of a book on GM. "But are they going to be able to stake their survival, which is really more of a now to five-year proposition, on it? I'd say they can't. They have to stake their future on Malibus, the Chevy Cruze, and much more conventional technologies."

U.S. automakers faced a barrage of demands last week that they provide evidence and assurance that they would use federal bailout money to transform their companies to produce automobiles of the future, using advanced technologies and featuring hybrid or plug-in vehicles. And in his "60 Minutes" interview on Nov. 16, Obama said that before backing a big loan package he wanted to be sure "that we are creating a bridge loan to somewhere as opposed to a bridge loan to nowhere."

But there's no guarantee that the new business model would be any more viable than the current one. Automobile experts estimate that the battery in a plug-in vehicle could add at least $8,000 to the cost of a car, maybe considerably more. Most Americans will be unwilling to pay the extra price, especially if gasoline prices languish around $2 a gallon.

That's why one of the mysteries about GM's plans to introduce the Volt in 2010 is how much it will cost to buy one. "What's the Volt going to cost? I would be happy to answer that if you can tell me the price of oil in 2010," said Robert A. Kruse, GM's executive director of global vehicle engineering for hybrids, electric vehicles and batteries. "I can tell you to the penny what it will cost GM, but pricing is much more related to market conditions."

The hurdles ahead for the Volt and other cars with new technologies pose dilemmas for automakers trying to gauge a market that is still very young for cars that don't exist while trying to stay in business during a downturn.

"These are hard choices," said Toyota chief technology officer Bill Reinert, part of the Prius design team. "Do you bet on lighter, smaller, more fuel efficient but ultimately less profitable cars or do you hold back a little on technology development and look at new versions of existing cars."

Many experts say that gas guzzlers will not fade away as long as Congress fails to impose higher taxes on gasoline to steer people toward fuel-efficient cars.

"You'd think from reading the media that we have had a burial ceremony at Arlington cemetery for the last pickup truck," said James Womack, a management expert who has written about the automobile industry. "I can easily imagine three years from now when public is focused on a new set of priorities . . . that this whole thing would go poof."

(AOL Autos) -- This automotive innovation from Ford has no wheels and no doors, but it has a very powerful engine.

Don't bother looking under the hood, the engine behind Ford Motor Company's Sync system is a microchip located in the dash of 21 new cars, trucks, and crossovers.

While tiny, the power of this chip is immense. It is what technophiles call a "speech" engine.

Running Microsoft software, Sync's speech engine is the key to delivering a fully integrated, voice-activated in-car communications and entertainment system. This means that now when you talk to your car it will really hear you, and then do something constructive.

We at AOL Autos have now driven hundreds of miles in Sync-equipped Fords and have found the system easy to set up and use, thus allaying our fears of having to deal with yet another complex and marginally useful road-going infotainment gadget.

If you're not an automotive technology guru, you might be thinking, "Cars are already too complicated, the last thing I need is something else to learn how to use that will distract me."

Thankfully, Ford and Microsoft made Sync simple, and designed the system to cut down on typical driver

How Sync works

When you slip behind the wheel of a new Ford equipped with Sync, whip out your Bluetooth-enabled cell phone and digital music player. Brands aren't important, because Sync syncs up with just about everything that might be in your pocket, purse or briefcase.

You must first "pair" (or link) your phone to Sync. This is as simple as connecting to a wireless Bluetooth headset, and with the phones we tried, this took less than 30 seconds each. AOL Autos: Most popular crossover vehicles

Tying into your music player is even easier. Every vehicle with Sync includes a USB port. This high-speed link to your player enables Sync to access your music player's song list and controls. The USB link also charges your unit while you drive. AOL Autos: Best car deals this month

With your phone and portable player hooked into the system, the Sync is ready to receive your voice commands. First, decide what you want to control; your phone or what's plugged into your USB port.

The cadence of operations goes like this: Press the "talking face" button on the steering wheel. A computerized voice responds by saying, "Please say a command." The computer's voice is not one you'll fall in love with and at this point isn't user selectable but "she" is easy to understand.

We wanted to try our phone first, so we responded by saying, "Phone." Sync then said, "Phone, say a command." Depending upon whom we were calling, we either said, "Call Home," or "Dial" plus the digits of the number we wanted to call. The phone call then takes place using the vehicle's audio system. Simple. AOL Autos: Hottest sports cars of 2009

The system was pretty darn good at recognizing what we were saying, regardless of who in the car was speaking (male or female voice, young or old). While we didn't come close to testing them all, the people from Ford and Microsoft say that Sync recognizes thousands of snippets of voice in English, Spanish, and French. AOL Autos: Top 5 luxury cars

Accessing numerous iPods proved just as easy as making phone calls. With the iPod plugged in, we again start the sequence by pressing the "talking face" button. The system responds with, "Please say a command," and then you say, "USB." Sync then says, "USB, say a command."

Your next response is important, because Sync searches for music by artist, song title, and genre information stored in each file's metatag. "Play Oscar Peterson" quickly resulted in our hearing one of the greatest piano players ever.

Sometimes the system got confused and pulled up songs or album titles that had the same number of syllables. Imagine the surprise of hearing Iggy Pop where you were wanted to hear some classic bee bop jazz. AOL Autos: Top 10 cars to keep you young

If you're old enough, talking to your car may take you back to the old TV show 'Kight Rider'. It made your author fairly self-conscious. However, this feeling quickly vanished with some successful practice. Younger drivers probably won't have these issues.

The high level of integration Sync provided was impressive, it can use your phone's advanced calling features like call waiting and conference calling. Visual items such as caller ID, a signal strength icon, and a phone battery charge icon all appear on the radio's display screen. With the phones we used, Sync even "rang" with personalized ring tones.

Sync can read incoming text messages, and accurately translate emoticons and messaging expressions such as "LOL." For safety, Ford and Microsoft elected not to enable text replies when the vehicle is in motion. However, so your friends won't feel ignored, the system does include 20 predefined responses that you can send on the fly including, yes, no, where are you and call me.

Sync's capabilities aren't limited to just these functions. If you store music on your phone or PDA, Sync can also stream music files via Bluetooth. Audio can also be accessed through a line-in jack but that doesn't provide a two-way connection between Sync and the music source, so voice commands won't work. Showing how much Ford and Microsoft built into Sync, the system can also retrieve songs off of USB memory sticks and flash drives.

For the technology gurus out there, Sync utilizes a 400 megahertz ARM11 processor. The processor is supported by 128 megs of RAM plus 256 megs of flash memory. To give us a benchmark on how fast Sync runs, the engineers from Microsoft say the system whips through data twice as fast as computers with the original Pentium processor.

During our test period, Sync operated without a single computer-type crash. We asked Ford engineers if any potential failure of Sync might somehow lead to a failure of the vehicle's other computer systems, including the ones that control the engine or air bags. The Sync team assured us that Sync is not connected to other computers vital to the operation of the vehicle, so even if some type of malfunction or virus struck Sync, it would not affect anything else in the vehicle.

Ford and Microsoft acknowledge that the system will require updates, so Sync is designed for that. Additionally, engineers we spoke to also noted that Sync (in its current form) has memory available for new features and functions. Expect more capabilities and utility in future releases.

Sync is only a $395 option on the 2008 Ford Focus we used as a test-host. That seems like a bargain to us, especially since hands-free phone use is becoming mandatory in many municipalities. Sync is standard or optional on 12 2008 and 2009 Ford, Lincoln and Mercury products. The technology will soon be available on all Ford Motor Company vehicles.

Ford makes trying out Sync easy. Dealerships have demonstration kiosks in their showrooms.

Back in the early 1980s, Chrysler was among the first manufacturers to build a talking car. Journalists made endless fun of the computerized voice that chided, "Your door is a jar." Of course it meant the door was open but ajar came across as if our door had suddenly turned into a product from Smuckers.

Automotive technology has come a long way since then, and you can expect systems like Ford's Sync to proliferate and gain even more capabilities

DEARBORN, Mich. -

Ford Motor Co. said Friday it lost $129 million in the third quarter as the struggling automaker burned through $7.7 billion in cash and set plans for more job cuts.

Ford said it will eliminate about 2,260 more white-collar employees in North America as it battles continued weak demand, the credit crisis and the worst economic downturn in decades.

"While Ford has been dramatically affected by the difficult business environment, we remain absolutely convinced that we have the right plan and are taking the right actions to weather this difficult period and emerge as a lean, globally integrated company poised for long-term profitable growth," Alan Mulally, president and chief executive, told industry analysts during a teleconference.

Ford said it lost 6 cents per share for the quarter, compared with a loss of $380 million, or 19 cents per share, a year ago.

The company posted a pretax loss of $2.7 billion from continuing operations. But it was offset partly by a $2 billion gain as the company shifted retiree health care liabilities to a trust run by the United Auto Workers.

Ford's global automotive operations had a pretax loss of $2.9 billion for the quarter, compared with a pretax loss of $362 million a year earlier.

Sales fell 22 percent to $32.1 billion from $41.1 billion due to lower volume and the sale of Jaguar and Land Rover.

Excluding special items, Ford lost $1.31 per share, worse than Wall Street expected. Analysts surveyed by Thomson Reuters predicted a loss of 94 cents per share on sales of $28 billion.

Dearborn-based Ford reported its worst three-month performance ever in the second quarter, when it lost nearly $8.7 billion.

The cash burn - in which a company spends more money than it takes in - was far higher than the $2.1 billion Ford used up in the second quarter.

Ford said the cash burn primarily reflected pretax automotive losses, changes in working capital and payments to its credit arm to reduce interest rates for buyers. It was exacerbated by sales drops and production cuts of 500,000 fewer vehicles from second-quarter levels, resulting in $3 billion less in incoming cash for the quarter.

Chief Financial Officer Lewis Booth would not say if he expects the cash burn rate will continue at the present levels, but said he was confident the company can make it through 2009.

"With our present assumptions, we are comfortable with our liquidity position," Booth told reporters Friday morning. "I think it goes without saying, forecasting the future at the moment is extremely difficult. Trying to find out just exactly what is happening with the consumer is really tough."

Industry analysts say that if the economy doesn't improve, Ford could run out of money sometime after 2010.

The company reported having $18.9 billion in cash on hand on Sept. 30, down from $26.6 billion at the end of the second quarter.

U.S. automakers have approached the U.S. government for low-interest loans as they try to weather the global economic slowdown. Ford is also among automakers that are talking with the European Commission for a low-interest loan of 40 billion euros, or about $51 billion. It also is talking to other governments.

Ford said it will cut North American production in the fourth quarter by 40,000 units more than what was announced in September, primarily with shift reductions and temporary plant shutdowns. In September the company announced a fourth-quarter production cut of 171,000 units over the fourth quarter of last year, mainly in trucks.

The salaried cuts, Ford said, equate to about 10 percent of its North American salaried work force of 22,600. It will reduce the work force primarily through personnel reductions and attrition, Mulally said.

It also said it has no plans to offer more buyout or early retirement packages to blue-collar workers.

The automaker started the year with 89,000 employees in North America but reduced that number to 80,200 as of Sept. 30 through attrition, hirings, buyouts and layoffs.

In a further effort to cut costs, Ford said it will eliminate merit pay increases in 2009 for salaried workers in North America, along with performance bonuses for salaried employees worldwide. It also will suspend matching contributions for U.S. salaried employees who take part in the company's savings and stock investment program.

Ford also announced that some of its vehicle programs will be deferred, although the company described the moves as minor timing changes.

Ford said it lost $2.6 billion pretax in North America, compared with a loss of $1 billion in the year-ago period.

It recorded a pretax profit of $480 million in South America, compared with $386 million last year. In Europe, the company made $69 million, a sharp drop from the $293 million in the year-ago period.

Ford's Asia-Pacific operations made $4 million, down from $30 million a year ago, while it lost $1 million on its interest in Mazda (other-otc: MZDAF.PK - news - people ), compared with a profit of $14 million in the third quarter of last year.

Volvo lost $458 million, wider than the $167 million loss last year. Ford Motor Credit Co. (nyse: FCJ - news - people ) had a pretax profit of $161 million, far lower than the $546 million in the same quarter last year.

In morning trading Friday, Ford shares rose 3 cents to $2.01.

DETROIT -

General Motors' October U.S. sales plunged 45 percent and Ford's dropped 30 percent, as low consumer confidence and tight credit combined to scare customers away from showrooms.

The results released Monday - along with a 23 percent drop at Toyota (nyse: TM - news - people ) and a 25 percent decline at Honda (nyse: HMC - news - people ) - are strong indications that sales for the industry as a whole may perhaps be the worst in 25 years.

Detroit-based General Motors Corp. (nyse: GM - news - people ) said its light trucks sales tumbled 51 percent compared with the same month last year, while demand for passenger cars fell 34 percent.

The results were less severe at Ford Motor Co. (nyse: F - news - people ), which said its Ford, Lincoln and Mercury car sales were off 27 percent, while light truck sales for the three brands were down more than 30 percent.

Overall, GM sold 168,719 vehicles, down from 307,408 in the same month last year, while Ford, including its Volvo brand, sold 132,278 light vehicles last month down from 189,515 in the same month last year.

Mike DiGiovanni, GM's executive director of global market and industry analysis, said the credit crisis and financial market turmoil are affecting the industry to a "frightening" level.

If GM's sales were adjusted for population growth, October would be the worst month of the post-World War II era, he said.

"Clearly we're in a very dire situation," he said.

Despite the steep drop, GM's total was enough to keep it ahead of Toyota Motor Corp. for the No. 1 U.S. sales spot. Toyota sold 152,101 vehicles, down from 197,592 in October 2007. The drop included a 34 percent decline in light truck demand, while car sales fell 15 percent.

Honda Motor Co. sold 85,864 vehicles as its truck sales fell 29 percent. But sales of cars from its Acura luxury division rose 6 percent.

Ford officials said on a conference call with reporters and industry analysts that as bad as October sales were, it's probably not the bottom.

Emily Kolinski Morris, the company's senior economist, said that because automobiles are more durable, people can wait without buying a new vehicle until they feel more confident in the economy.

"The answer to when we will start to come out of that trough lies in when the economy comes out of that trough," Kolinski Morris said.

Poor sales in the last three months are expected to equal dismal third-quarter earnings for the struggling automaker. Ford is scheduled to release its financial results Friday, and the down sales raise the possibility of further plant closures or shift cuts. Ford has said it will continue to reduce production to match consumer demand.

Sales of the company's F-Series pickup trucks, traditionally its top seller, fell 16 percent in October. The company began selling a new version of the pickup last month and has announced plans to add 1,000 workers at its Dearborn Truck Plant in January to handle what it expects will be increased demand.

Some industry analysts are predicting a seasonally adjusted annual sales rate in October of 10.8 million or less, down from 16.1 million a year ago. If the rate drops below 10.83 million, it would be the worst sales month since March 1983, according to Ward's AutoInfoBank. The closely watched figure indicates what sales would be if they remained at their current rate all year, with adjustments for seasonal fluctuations.

After reeling from a 32 percent drop in September sales, Toyota launched zero-percent financing on almost all of its models prompting analysts to speculate that it could post better-than-average sales as a result.

But, like at Ford, the vast majority of Toyota models still posted double-digit declines. Notable exceptions included sales of the Corolla, which rose 6.1 percent, and the Sequoia sport utility vehicle, which posted a 21 percent gain.

Meanwhile, GM's financing arm, GMAC (nyse: GJM - news - people ) Financial Services, said it was tightening its lending standards to require a credit score of at least 700, potentially shutting out some buyers.

Analysts said GM's employee pricing incentives in September could have pulled in buyers who would have waited to purchase cars, further reducing GM's October sales.

The Associated Press reports unadjusted auto sales figures, calculating the percentage change in the total number of vehicles sold in one month compared with the same month a year earlier. Some automakers report percentages adjusted for sales days. There were 23 sales days last month, two less than in October 2007.

AP Auto Writer Bree Fowler reported from New York.

October Auto Sales: Shriveling demand hurts Ford

DEARBORN, Mich. -

Ford Motor Co. said Monday its October U.S. sales tumbled on steep drops in demand for both cars and light trucks.

Ford sold a total of 132,278 light vehicles in October, down 30.2 percent from 189,515 in the same month last year. Light vehicle sales exclude heavy trucks.

Sales of the Dearborn, Mich.-based automaker's Ford, Lincoln and Mercury brand cars dropped 26.8 percent to 40,854 units from 55,812. Sales of the company's Focus small car also fell 18.2 percent to 10,576 vehicles, while Fusion sales edged down 3.3 percent to 10,836.

Demand for Ford, Lincoln and Mercury brand light trucks tumbled 30.4 percent to 87,707 vehicles from 125,942.

The results included a 53.9 percent drop in sport utility vehicle demand to 9,102 units and a 38.8 percent decrease in sales of crossover vehicles to 22,552.

Sales of the company's top selling F-Series pickups fell 16.3 percent to 43,324 units.

Demand for the company's Volvo brand vehicles fell 52.1 percent to 3,717 units.

So far this year, Ford sales are down 18.6 percent to 1.7 million vehicles from 2.1 million at the same time last year.

Ford shares fell 1 cent to $2.18 in midday trading.