(CBS/AP)Ford Motor Co. lost $5.8 billion in the fourth quarter amid slumping sales and huge restructuring costs, pushing the automaker’s deficit for the year to $12.7 billion, the largest in its 103-year history.

The annual loss, reported Thursday, surpassed its previous record of $7.39 billion set in 1992. The 2006 loss amounted to $6.79 per share versus a profit of $1.44 billion, or 77 cents a share, in 2005.

It was far from the largest quarterly or annual corporate loss on record  Time Warner Inc. reported a $97.2 billion loss in 2002, largely due to new accounting rules about how to value assets. Ford could not rely on accounting rules, however, to explain its staggering total, which represented a loss of $4,380 on each car or truck it sold in 2006.

Ford’s loss also fell short of the biggest annual deficit in the auto industry. General Motors Corp. lost $23.4 billion in 1992.

Dearborn-based Ford predicted more losses for this year and in 2008, but said its restructuring plan is on track to return to profitability in 2009.

“We know where we are. We are dealing with it and we’re on plan,” Chief Executive Officer Alan Mulally told reporters and industry analysts in a conference call.

The company, which lost $6 billion on North American operations alone, said it expects to burn up $10 billion in cash to run its business through 2009 and spend another $7 billion to invest in new products.

The fourth-quarter loss was the worst final-quarter loss in Ford’s history and its second-worst quarterly performance. Ford lost $6.7 billion in the first quarter of 1992, due mainly to accounting rule changes on health care liabilities.

Excluding special items, Ford lost $1.50 per share in all of 2006, worse than Wall Street predicted. Fourteen analysts polled by Thomson Financial expected a loss of $1.35 per share for the year, excluding special items.

Its shares rose 2 cents, or 0.2 percent, to close at $8.22 on the New York Stock Exchange.

Ford, faced with increasing competition from overseas rivals such as Toyota Motor Corp., is banking on the restructuring to pull it through the next two years. Mulally, hired from aerospace giant Boeing Co., is leading the drastic efforts to turn around the company.

Ford mortgaged its assets to borrow up to $23.4 billion to pay for the restructuring and to cover losses expected until 2009. About http://www.cbsnews.com/stories/2006/11/29/business/main2213978.shtml or early retirement offers, and Ford plans to cut its white-collar work force by 14,000 with buyouts and early retirements.

In all, Ford laid off nearly half of its hourly workforce, reports CBS News correspondent Anthony Mason.

“I haven’t really thought about that last stroll out the door,” said Steve Bral, who accepted the company’s buyout offer. “Thats going to be very difficult after 18 years.”

Bral’s father and grandfather also worked for Ford. “There’s a lot of anxiety about what’s life gonna be like when we move to a new state, a new job, basically a new beginning.”

Chief Financial Officer Don Leclair said Ford expects favorable results from its automotive business in 2007. But because of interest on its debt “total automotive results are expected to be worse in 2007 than in 2006,” he said.

Leclair said the company finished 2006 with $33.9 billion in cash available for its automotive operations, including $12 billion that it borrowed in December. He said the company could tap into nearly all of that cash to fund its operations.

The company is on target, though, to achieve its goal of cutting $5 billion in annual costs by 2008 compared with 2005 levels, Leclair said.

Mulally said Ford will continue to review its costs, looking for more cuts as it gains efficiencies from building more cars worldwide on fewer frames in more efficient factories.

“The more I review the details, the more confident I am that we can continue that cost reduction through 2009 and beyond,” he said.

Ford, which relied on truck and sport utility vehicle sales for much of its profits, was hurt last year as $3 per gallon gasoline sent consumers fleeing to smaller, more fuel-efficient vehicles. Ford has seen its market share deteriorate in recent years. At the same time, Toyota has seen its U.S. sales rise, moving past Ford into the No. 2 sales spot in July and November.

Ford has rolled out or will introduce several new or updated products during 2007, including the Edge crossover, new F-series Super Duty pickups, a redesigned Focus small car and an updated Five Hundred larger sedan.

But many analysts are skeptical that the products are strong enough to turn the company around.

“Ford is definitely going to look at doing partnerships with other companies, auto industry analyst John McElroy told CBS station WWJ in Detroit.

McElroy, though, said it is unlikely Ford would take part in any major mergers or buyouts.

Mulally said earlier this month that Ford’s restructuring plan remained “absolutely the right thing to do.”

Ford said that special items associated with restructuring costs totaled $9.9 billion for the year as the company continues efforts to shrink itself to match reduced demand for its cars and trucks.

Sales for the fourth-quarter fell to $40.3 billion from $46.3 billion a year ago, while annual sales dropped to $160.1 billion from $176.9 billion in 2005.
) MMVII, CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.

NEW YORKIf you need help with your taxes, you don’t have to pay a tax preparer or spend big bucks on tax prep software. The is once again offering its program, which partners the IRS with 20 tax software companies to allow taxpayers with an adjusted gross income of $52,000 or less in 2006 to electronically file their federal tax returns for free.

To use the program, visit the Free File link at http://www.irs.gov/ where you are then directed to the list of companies participating in the Free File program. You must click on the link for the company you want to use, after determining whether you meet its criteria.

http://www.foxnews.com/business/personalfinance/tax/index.html

According to the IRS, 70 percent of all taxpayers (about 95 million) are eligible to take advantage of Free File. More than 15.4 million tax returns have been prepared and e-filed through Free File since its debut in 2003. Read more.

But this year, the IRS has made some changes to Free File. There is a Spanish-language version available for the first time, and users won’t encounter advertising that touts commercial products such as mortgages, insurance and refund-anticipation loans, due to new restrictions from the IRS. Consumer advocates have railed against the Free File program’s susceptibility to such advertising, particularly for costly refund-anticipation loans that come with interest rates as high as 500 percent. Beware .

Just watch out Д if you use Free File, you may still be susceptible to fees for state returns. According to the IRS, some, but not all, companies offer free state tax return preparation and e-filing.

http://www.foxnews.com/business/personalfinance/tax/index.html

Copyright (c) 2006 MarketWatch, Inc.

DALLAS - J.C. Penney Co. removed some fur-trimmed coats from its racks around Christmas after animal-rights activists objected that the fur came from wild dogs in China.

Last week, the department-store company put the coats back on the racks but only after directing employees to use marker pens to blot out the line on the label that identified the trim as raccoon fur.

The fur-collared leather coats were sold under the house brands St. Johns Bay and a.n.a., and by this week they were marked down at a Penneys in Dallas from the original $349.99 to $74.99. About two dozen remained.

We sold a lot of them during Christmas, said a saleswoman at a Penney store in North Carolina who spoke on condition of anonymity because she feared losing her job. I hope people who bought those coats arent animal-lovers. But I guess if theyre wearing fur, theyre not.

By putting the coats back on the racks, Penney is charting a different course than rival Macys, which last month pulled Sean John jackets after they turned out to contain the same fur. Macys said it has a policy against selling products with dog fur.

Animal-rights groups are using the incident to pressure Penney to drop sales of all real fur, including fox. A few clothiers such as Polo Ralph Lauren and J. Crew Group Inc. have stopped using fur, and designers Kenneth Cole and Calvin Klein have promised to follow suit.

But Penney, with more than 1,000 stores catering to middle-income shoppers, says it has no plans to alter its fashion selections.

We do sell a few fur-trim items. We will continue to do so, said Darcie Brossart, a spokeswoman for the Plano, Texas-based company.

Fur-harvesting
Penney also downplays any link between Lassie and the animal whose fur is used on some of its garments. That animal is usually called a raccoon dog because of its full coat and dark patches around the eyes.

Asiatic raccoon is the species name, Brossart said. Its on the Federal Trade Commissions list of fur that is legal to sell in the United States. Its not a dog.

Animal-rights advocates counter that although it looks like an oversized, fluffy raccoon and isnt kept as a pet, it is a canine breed something Penney doesnt dispute.

They are definitely a member of the dog family, said Kristin Leppert, manager of the anti-fur campaign at The Humane Society of the United States. Whats equally important is that theyre getting killed by the millions in the most atrocious way.

Activists from Swiss Animal Protection posing as a documentary film crew say they went to China and photographed raccoon dogs and foxes being killed at large fur-harvesting operations.

The crews disturbing video posted on the Internet shows animals clubbed or slammed on the ground. Some continue writhing, gasping and blinking as they are skinned alive.

‘Raccoon’ blotted from labels
Clothing made with raccoon dog fur has turned up at several retailers, according to Leppert of the Humane Society. She said she bought a St. Johns Bay coat in Maryland and sent it for analysis at a German laboratory, which said the fur was raccoon dog instead of raccoon.

Penney sent samples to a lab near Dallas, which also confirmed the fur was raccoon dog, Brossart said. The coats were pulled off racks two days before Christmas.

Brossart said company lawyers determined it was legal to sell the coats as long as they didnt claim that the fur came from a particular species. A new order went to stores last week, and the word raccoon was blotted out from the labels.

We always knew we were selling real fur, Brossart said, but we didnt want any customers to think they were wearing raccoon. 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.