Detroit's Big Three automakers spent last year shedding tens of thousands of workers , overhauling their marketing and shaking up their managements. Now , it's becoming clear that even more-drastic action may be needed to turn them around.

Thursday, Ford Motor Co. announced losses of $5.8 billion for the fourth quarter and $12.7 billion for all of 2006, the deepest deficit in the 103-year history of the nation's No. 2 automaker. Also expected to report losses for the year are General Motors Corp., which Thursday said it will delay announcing its fourth-quarter financial results, and DaimlerChrysler AG's Chrysler Group. That would make 2006 the first year since 1991 that all three companies were in the red.

For all their efforts last year, the three U.S. auto makers continue to labor under heavy cost burdens, including hefty obligations to their union workers. But their real challenge is how to stop burning cash in futile efforts to manage decline. They can no longer rely on the cost-cutting and sales-boosting strategies of the past, such as squeezing parts suppliers for discounts, pressuring dealers to accept excess inventory and demanding higher prices from consumers.

Today they face suppliers who are less likely to give in to their demands, consumers who want less costly and less profitable but more-fuel-efficient vehicles, and auto dealers who are less dependent on a single Detroit brand. At the same time, foreign rivals are stealing away market share.

"It is a tougher environment to restructure," said Ford Chief Financial Officer Don Leclair, in an interview. "The dealer body is stressed and suppliers are stressed, and to a large degree that's reflective of our own issues here."

So far, Wall Street has been willing to finance Detroit's losses. Thursday, Ford executives highlighted the $33.9 billion in cash on hand in the company's automotive operations. GM bolstered its balance sheet last year by selling a 51 percent stake in its profitable finance arm -- a business long held to be a core operation.

But in a fresh blow to its credibility with investors, GM late Thursday cited a series of new accounting issues. The No. 1 auto maker said it expects to restate financial results for 2002 through the third quarter of 2006 because it overstated certain deferred tax liabilities. It also said it is reviewing its accounting for certain hedging activities and "other miscellaneous adjustments." In after-hours trading, GM shares were down 19 cents from their 4 p.m. close of $33.14 in composite trading on the New York Stock Exchange.

GM said it expects to be profitable in the fourth quarter of 2006, with record revenue, but it gave no figures. The company, which said it ended 2006 with $26.4 billion in cash, added that it expects to file its annual report with the Securities and Exchange Commission by March 1, and will provide more information on its financial reporting during the week of Feb. 5. GM had been scheduled to release results Tuesday.

Thursday's disclosure adds to a string of accounting problems GM has reported since 2005. Last year it restated its results from 2000 to 2005 to correct accounting errors. In November, it named Nick S. Cyprus, a former AT&T controller and chief accounting officer, as its controller and chief accounting officer, effective Dec. 1.

For Ford, the pain looks even further from over. Despite a strong U.S. economy, Ford expects to burn through another $17 billion in the next three years as it shrinks its North American operations to adjust to lower sales.

Ford said Thursday it expects its $2.8 billion operating loss in 2006 to grow in 2007 and doesn't foresee a profit until 2009. In 2005, Ford had a profit of $1.4 billion. In 4 p.m. NYSE composite trading Thursday, Ford shares slipped two cents to $8.22.

Detroit's troubles begin with consumers. Car buyers, accustomed to looking for the best dealer incentives, continue to do just that, taxing attempts by GM and Ford to wean themselves off costly sales promotions such as rebates and low-interest financing. Ford estimated that lower prices, mostly in the form of sales incentives, cost it about $1.9 billion more in 2006 than in 2005. Ford's automotive operations lost $5.2 billion in 2006, compared with a $1 billion loss a year earlier.

Ford said that despite its costly push to leave the money-losing rental-car business, which involves discontinuing the Ford Taurus sedan and Ford Freestar minivan, it will likely see flat to lower prices again this year.

The rise in multibrand auto dealers has made it more difficult for the Big Three to lean on their dealer networks to accept more cars and trucks than they need, a tactic the car makers once used to prop up revenue. Chrysler, for example, faced a near revolt by its dealers last year after it pushed them to take models such as the Jeep Commander that weren't selling nearly as well as projected.

Many dealers have added Asian auto brands such as Toyota or Honda to their mix, making them better able to resist Detroit's demands. The creation and growth of big dealer chains such as AutoNation Inc. and Group 1 Automotive Inc. have also given dealers more leverage.

As a result, all of Detroit's auto makers had to cut production in late 2006 while dealers cleared their lots of unsold vehicles. Ford said Thursday it will cut production in the first quarter of 2007 by a further 10,000 vehicles. Ford closed assembly plants in Atlanta and St. Louis last year and will continue closing plants over the next few years.

On the manufacturing front, the auto industry's parts and commodity suppliers are increasingly unwilling to accept Big Three demands for price cuts. Several of the biggest parts makers, such as Delphi Corp., Dana Corp. and Collins & Aikman Corp., have filed for bankruptcy-court protection since 2005, and moved to reject contracts or demand price increases as is common in bankruptcy proceedings.

Parts suppliers that have emerged from bankruptcy reorganization recently are frequently doing so with backing from big private-equity funds, which are loath to offer price concessions or take business at a loss, a common practice among suppliers over the past decade. Equity funds also appear more skeptical of Big Three sales projections, which have often been too optimistic and have cost suppliers that expanded on the basis of those projections.

"They have gone to the supply base for years, and the well has been emptied now," said Van Conway, senior managing director of Conway, MacKenzie & Dunleavy, a turnaround consulting firm in Birmingham, Mich. "There's no loyalty any more."

Both GM and Ford expect their commodity costs to jump by $1 billion or more in 2007, in part due to rising costs for steel -- an industry that was overhauled in the bankruptcy process auto makers are trying to avoid. In September, Ford had to back off its goal of $6 billion in commodity-cost savings by 2010. Ford, which spends $90 billion a year world-wide on parts and services, said it now hopes to achieve that savings no later than 2012.

Not all of Detroit's auto makers are in equal straits. GM, which previously reported a loss of $10.6 billion for 2005, is expected to report a profit in 2007. But the company has warned investors that its cash flow will be negative. To bolster its cash reserves, GM said Thursday it is considering the sale of its Allison heavy-duty transmission unit.

Chrysler had been the one profitable Detroit auto maker until late in 2006, but is now slated to roll out a restructuring plan in mid-February.

Ford Chief Executive Alan Mulally's efforts to nurse his company back to health are only made tougher by the fact that GM, whose vehicles compete most directly with Ford's, is further along in its turnaround effort. Moreover, in confronting one problem, Mr. Mulally, who has held his job just shy of four months, often risks creating another.

Mr. Mulally is trying, for example, to stem an exodus of management talent at Ford, whose 37,000 salaried workers include about 300 senior officers and about 2,000 director-level executives. He confirmed Thursday that Ford is considering paying bonuses to its salaried workers, something it has done just twice in the past five years.

However, the possibility of bonuses for salaried workers has caused turmoil within Ford's union work force, which has agreed to billions of dollars in givebacks in retiree health-care benefits and substantial changes in work rules to ease the company's cost burden. Those rule changes are expected to save Ford at least $750 million a year.

Mr. Mulally said he "absolutely thinks" he can get the UAW to understand the need for salaried bonuses at the same time he is asking union members to make concessions now and probably later this year when national contract talks begin.

"We are in a turnaround situation and we need the absolute best, skilled and motivated team in all of the positions, and so that is the way we are looking at it," he said.

Mr. Mulally said he remains optimistic the auto maker can return to profitability. "We aren't frustrated at all. We are just dealing with the way it is and pulling all the levers," he said. "We can do this."