DETROIT (Reuters) - Ford Motor Co posted a deeper-than-expected $5.9 billion quarterly loss yesterday but said it would have the cash to survive the worst downturn in auto sales in decades without a US government bailout.

Ford said it was cutting some 2,500 white-collar jobs and drawing down its remaining credit after burning through $5.5 billion of cash as global auto sales plunged.

For 2008, Ford posted a loss of $14.6 billion for 2008, its third consecutive annual loss.

For the year, Ford burned through $21 billion but said it expected that it would be be able to better conserve cash in 2009 if US sales stabilise in the second half as it expects.

The No. 2 US automaker also said it would draw down $10.1-billion remaining on its credit line and defer $2 billion in payments pledged to a trust fund aligned with the United Auto Workers union to bolster its cash in the current quarter.

"We took this action because of our growing concerns about the instability of the capital markets," Ford chief executive Alan Mulally told analysts on a conference call.

Shares in Ford were down about two percent in early trading.

Analysts credit Ford under Mulally with having the foresight to borrow heavily in 2006, before credit markets shut down and auto sales plunged in 2008.

"They're doing what they can to take costs out but the other side of the equation — sales — has got to recover," said Erich Merkle, an independent auto analyst.

Ford's captive credit arm, Ford Motor Credit, said it would cut 1,200 jobs, or 20 percent of its staff. For its auto operations, Ford said it had almost completed 1,300 white-collar job cuts that it began in November.

Ford said the UAW had also agreed to suspend its jobs bank, dropping a controversial programme that had guaranteed nearly full wages and benefits for union workers after their jobs were eliminated. Ford had about 1,500 UAW workers in its jobs bank at the end of the year.

Suspending the UAW jobs bank had been a condition imposed by the federal government for the $17.4-billion bailout of Ford's rivals General Motors Corp and Chrysler. Both GM and Chrysler had previously announced an end to the programme.

Overall, Ford cut its North American auto workforce by 5,000 jobs in the fourth quarter to 75,200, most of that in its hourly workforce. The Ford credit, and salaried job cuts will be reflected in 2009 results.

"I think it's by far the most volatile period we've ever seen," chief financial officer Lewis Booth told reporters. "We're not seeing any signs of recovery yet."

Still, Booth said Ford was expecting some recovery in the US market in the second half of the year and he expected it would be the first region to show signs of a rebound.

Ford's net loss widened to $5.88 billion, or $2.46 per share, in the quarter, from $2.8 billion, or $1.33 per share, a year earlier.

Excluding one-time items, the per-share loss was $1.37 compared with the $1.23 per analysts had expected.

Ford Motor Credit, traditionally a source of profit, slipped to a $372 million quarterly loss on credit-related charges, derivatives losses and lower loan volumes.

Volvo, a the Swedish luxury brand Ford is looking to sell, posted a forth-quarter loss of $736 million on a pretax basis, down from a break-even position a year earlier. Mulally said Ford's review of the Volvo brand would take some time.

Ford ended 2008 with $13.4 billion cash. It said it would receive the $10.1 billion from its line of credit on February 3.

Ford has asked for a $9 billion line of credit from the US government as insurance against a worsening in the global economy. It also expects to receive $5 billion of direct loans from a US programme to support improved fuel economy.

• General Motors Corp. said that its "jobs bank" programme will end on Monday, following a similar move at Chrysler LLC that helps satisfy the conditions the government imposed when it lent the automakers $17.4 billion late last year.

The programme, which gives union workers at the Detroit Three most of their pay and benefits while they are laid off, was the target of much ire during the companies' requests for a federal bailout.

GM spokesman Tony Sapienza said that the 1,600 GM workers in the jobs bank will be placed on lay-off and will need to file for unemployment. They'll receive about 72 percent of their salaries, which will be paid for by state unemployment benefits and GM subsidies.

The length of time workers can receive the benefits varies from state to state but usually amounts to about 48 weeks, Sapienza said.

Christine Moroski, a spokeswoman for the United Auto Workers union, declined to comment.

Sapienza said the move will allow cash-strapped GM to use state unemployment benefits to help cover some of the costs of paying the workers.

"We really appreciate the union's willingness to work with us as we continue to restructure for long-term viability," Sapienza said.

Union officials said late last week that Chrysler was eliminating its jobs bank effective January 26. Like at Detroit-based GM, Chrysler's affected workers will continue to receive supplemental pay to make up much of their wages after unemployment compensation.