Lear Corp. reported a fourth quarter net loss of $688.2 million or $8.91 a share on net sales of $2.6 billion. That compares with a net profit of $27 million or 34 cents per share in 2007.

The pre-tax loss was $692.1 million, a ballooning loss from last year's net income of $45.1 million for the supplier of seating, electrical and electronic products for the auto industry. The loss includes a non-cash goodwill impairment charge of $530 million and restructuring costs of $66.2 million.

Sales for the final three months of the year were 1.3 billion units below the same period in 2007, reflecting a 26 percent drop in production in North America (Detroit's Big Three were down 30 percent) and a 29 percent decrease in Europe, said Chairman and CEO Bob Rossiter.

Stripping away restructuring costs and special charges, operations registered income of $22 million in the quarter compared with core operating earnings of $179 million in 2007.

For the full year, Lear reported a net loss of $689.9 million, or $8.93 per share, compared with net income of $241.5 million, or $3.09 per share, for the full-year 2007.

Ongoing liquidity remains a concern for Lear which announced earlier this month it is seeking an amendment and waiver under its primary credit facility and hired Goldman Sachs to assist in the proposed bank amendment that it had hoped to complete prior to finalizing its 2008 financial statements.

In releasing its fourth-quarter and full-year financials today, the supplier said it has been talking to its major banks to amend its borrowing terms and will be extending proposals to the larger bank group over the next few weeks.

Lear ended the year with about $1.6 billion in cash and cash equivalents, which Rossiter said is ample for ongoing ordinary business obligations.

But the company had to use the $1.2 billion it had available in a revolving credit facility in the fourth quarter and did not pay it off, which left the supplier essentially in breach of its covenant with its primary lenders.

And Lear will need further financial flexibility to continue to restructure and downsize to get through the next 18 months of what is projected to be lower production levels in the auto industry, said Rossiter.

The focus for the Southfield-based supplier going forward is on reducing costs, managing liquidity and positioning Lear for the eventual recovery of the industry, said Rossiter.

In the past year Lear has diversified geographically, with 64 percent of its sales outside North America. In 2007, only 55 percent was in other markets.

Rossiter said Lear has secured a number of contracts for wire harnesses and other electronics work for upcoming hybrids and electric vehicles including the Chevrolet Volt, Fisker Karma, the next generation of BMW hybrids, as well as Land Rover, Saturn and Renault hybrids.

Lear said it is not providing guidance for 2009.

Last week Deutsche Bank upgraded shares of Lear, saying it believes a bankruptcy is "somewhat less likely" for the automotive parts supplier than the market current perceives.