'Anything that can incentivize the consumer, especially with regard to automobiles, would be great, because it's such an important part of the economy,' CEO Alan Mulally told The Detroit News. 'I know that they know how important the automotive sector is.'

Other countries have taken more direct action to help boost auto sales. France, for example, has offered cash to consumers who trade in older vehicles. Brazil has given a tax holiday on new car purchases.

Auto analyst Rebecca Lindland of IHS Global Insight said Ford is playing a risky game by asking the federal government to help bail out the rest of the industry while trumpeting the relative strength of its cash position.

'It certainly helps Ford indirectly if the consumer can get some help and suppliers can get some help and, to some extent, it helps Ford if the industry as a whole starts doing better,' she said. 'It's an interesting strategy, because we're not 100 percent convinced that they won't need money at some point in time.'

Losses worse than expected

That concern was raised further by the fact the company burned through $19.5 billion in cash in 2008, with $5.5 billion coming in the last quarter. Ford finished the year with $24 billion in available liquidity to fund its automotive operations, including $13.4 billion in cash. But it also said it would draw down its $10.1 billion credit revolver.

Chief Financial Officer Lewis Booth told reporters that Ford did not intend to use that money to fund operations, nor was it required to maintain minimum cash levels. Rather, he said Ford decided to put that money on its own books now because of the 'uncertainty' in the financial markets.

Ford lost about $800 million in available credit when Lehman Bros. collapsed last year.

Nonetheless, the move underscored the challenges analysts say Ford faces.

'In our view, the action does not reflect an imminent danger of Ford's cash balances falling to dangerously low levels,' said Standard & Poor's analyst Robert Schulz. 'However, it is consistent with our previously stated view that cash outflows during 2009 -- in light of very weak global auto sales -- could eventually test the company's ability to maintain sufficient liquidity throughout 2009.'

Excluding one-time charges, Ford's full-year after-tax loss from continuing operations was just more than $7.1 billion, translating into a loss of $3.13 per share. Its fourth quarter after-tax loss from continuing operations was $3.3 billion, or $1.37 per share, compared with a loss of $487 million, or 23 cents per share, a year ago. Analysts had been expecting a loss of $1.30 per share, according to a survey by Thomson Reuters conducted before Ford's earnings were announced.

More job cuts announced

Ford may not be asking Washington for handouts, but it is asking its employees to accept more painful cuts as it struggles to meet its goal of restoring profitability in 2011.

On Thursday, the automaker announced that it will eliminate 1,200 jobs at Ford Credit to further reduce operating costs in its lending arm. Ford also said it had reached an agreement with the United Auto Workers to end the controversial jobs bank program, which continues to provide wages and benefits to some 1,500 idled factory workers.

GM and Chrysler have already announced similar deals with the union.

Those companies are mandated to seek significant concessions from the UAW, suppliers and bondholders as a condition of the bridge loans they received from the White House in December. Ford, which did not ask for federal aid, is not bound by those conditions, but it still hopes to negotiate similar concessions, Mulally said.

Moody's Investors Service said there is a 'risk that the company will have to undertake some form of balance sheet restructuring in order to achieve the same UAW concessions that General Motors and Chrysler are likely to achieve as a result of the recently-approved government bailout loans.'

'Such a balance sheet restructuring would likely entail a loss for bondholders and would be viewed by Moody's as a distressed exchange and consequently treated as a default for analytic purposes,' said Michael Mulvaney, managing director of the firm's corporate finance group.

Ford said that it expects to significantly reduce its cash burn rate this year, despite a dismal economic outlook. It will save billions by deferring payments to a union-run trust for retiree healthcare and through operating cost reductions announced last fall, Booth said.

Ford is currently in the midst of its latest round of white-collar layoffs, which aims to cut Ford's U.S. salaried payroll by another 10 percent. The automaker has eliminated more than 13,000 salaried positions and more than 43,500 hourly jobs in North America since the end of 2005.

Mulally said Ford has reduced its operating costs in North America by more than $5 billion, putting it ahead of the goals set in its turnaround plan. But he acknowledged that these improvements continue to be undermined by the harsh realities of the marketplace.

Progress in U.S. operations

Ford's fourth quarter pre-tax loss for North American automotive operations was $1.9 billion, just $400 million more than the company reported for the same period in 2007. Fourth quarter revenue was $11.3 billion, down from $17.3 billion a year ago. That means Ford realized significant gains from its North American cost-cutting efforts during the quarter.

JPMorgan analyst Himanshu Patel said Ford's earnings were not as disappointing as they might seem because of this progress on reducing North American operating costs.

Overall, expect neutral reaction (from the market),' he said.

Ford's shares dropped less than 4 percent on the news Thursday, falling from $2.03 to $1.95.

Outlook stays 'challenging'

Ford said 2009 would be a 'challenging' year for it and the entire automotive industry.

Booth said the company now expects U.S. vehicle sales to be as low as 11.5 million units this year, cutting the company's forecast by up to a million units from just a few weeks ago. Mulally said early indications are that January will see a modest share gain for Ford.

While Lindland agreed that Ford may continue to pick up market share, she warned that its forecasts for the industry as a whole are still too high -- and she said government incentives are unlikely to sway consumers any more than the ones already being offered by Ford and other automakers.

'It all comes back to consumer confidence in the broader economy,' she said, noting that her firm is predicting sales of 10.4 million units this year. 'We're not seeing any sign in the economy that we're wrong.'