The troubled American carmaker Ford has crashed $12.7bn (£6.4bn) into the red in the worst loss of its 103-year history - yet the company is considering paying performance bonuses to its management.
Battered by high fuel prices and fierce Japanese competition, Ford's loss amounted to more than $34m a day in 2006. The deficit eclipsed the previous record of $1.4bn.
As American car buyers shunned big vehicles such as the Explorer and Ford's F-series pickup trucks, the company's sales sank by 9.5% to $160bn.
More than 44,000 workers are to lose their jobs in a cost-cutting strategy involving the closure of 16 plants. But Ford's chief executive, Alan Mulally, revealed yesterday that senior executives could still get performance-related rewards.
"It is part of our overall compensation plan to make sure we are paying competitive wages and benefits, but we've not made any final decisions yet," said Mr Mulally, who added that a decision would be made in the "next couple of months".
Payouts risk infuriating the powerful United Auto Workers union, which was involved in negotiations last year to trim the healthcare benefits of retired employees.
Industry experts said it was a delicate call for Mr Mulally, who was appointed in September to turn around the company. If they feel hard done by, talented executives could defect to financially healthier competitors such as Toyota and Honda.
Brian Johnson, an analyst at Lehman Brothers, said: "Toyota and Nissan are trying to lure away the best of the big three [Ford, General Motors and Chrysler]. In his own mind, Alan's probably balancing how he looks good to the unions while motivating his people to retain them and get the best out of them."
Ford was recently obliged to offer its factories, car stocks and machinery as security for loans of $25bn to pay for its restructuring, the first time it has had to mortgage its assets.
In a conference call, Mr Mulally offered assurances yesterday that the reorganisation was on schedule: "We recognise the position we're in and we're taking the appropriate steps to confront the issues we're facing. We have a plan and we're on track to deliver it."
Ford's premier automotive division, which includes Britain's Jaguar, Land Rover and the up-for-sale Aston Martin brands, made a loss of $327m largely due to a $1.6bn write-off in October to cover the cost of warranties on poorly performing older British cars.
There were signs of improvement in the final quarter, when the division made a $135m profit, attributed to keen pricing and to the popularity of new models including Land Rover's LR2, made in Gaydon, near Warwick.
Ford's shares edged up by 1.7% to $8.14, reflecting confidence that the company will survive its present difficulties.
Anil Valdan, an industry expert at the consultancy Frost & Sullivan, said: "It's now a case of how long it will take to recover, rather than a question over the survival of Ford."
In a nod towards demand for more environmentally friendly vehicles, Ford revealed a hybrid version of its Edge car at this week's Washington motor show.
