Auto and truck parts maker Dana Corp. (DCN) on Monday said accounting problems will force it to restate earnings for 2004 and the first half of 2005, and delay its posting of third-quarter 2005 earnings, sending shares down 25 percent in early trading.

Toledo, Ohio-based Dana, which counts Ford Motor Co. (F) and General Motors Corp. (GM) among its largest customers for axles, transmissions and other components, said it believes it has found material weakness in its internal controls with respect to financial reporting, and is investigating its accounting.

Dana said the main purpose of the restatements will be to correct issues involving customer pricing and transactions with suppliers in the company's commercial vehicle business, and as a result, also withdrew earnings forecasts for the rest of 2005.

The restatements and accounting investigation pose yet another challenge to an industry rocked by high raw materials prices, soaring labor costs, and reduced North American production of light trucks and sports utility vehicles by U.S. automakers.

Dana's announcement comes just two days after rival parts maker Delphi Corp. (DPH) filed for bankruptcy protection.

"It's more than labor costs. (Dana) needs to become more efficient," said Standard and Poor's analyst Dan DiSenzo, whose rating agency last month downgraded Dana's debt to a "speculative grade" of "BB+," from "BBB-."

DiSenzo said Dana's problems are not comparable with Delphi's, at least at this point.

"They've received bank waivers and they have a fair amount of cash on the balance sheet, so it's not a question of major liquidity problems," he said. "In comparison to Delphi, it's certainly not as significant."

On September 15, Dana slashed its 2005 profit forecast by more than half, citing higher steel and energy costs. It said at the time its truck parts unit was unable to meet projected cost cuts and was operating with significant inefficiencies.

Dana has not set a new date for its third-quarter earnings release, which had been slated for October 19.

The company also said it will likely have to write off its U.S. deferred tax assets, which will cut into net income.

Those tax assets totaled $740 million at the end of June. Dana said it will be unable to maintain those assets or record similar benefits in the future.

Shares of Dana fell $2.32 to $6.87 on the New York Stock Exchange. American Axle & Manufacturing (AXL) was down $1.12, or 5 percent, at $21.06. Johnson Controls (JCI) fell 1.3 percent to $60.75.

Counting Monday's drop, Dana shares have lost 60 percent since the start of 2005, lagging rivals like American Axle & Manufacturing, Johnson Controls and the overall S&P Auto Parts and Equipment Index, which is down 31 percent. Another parts maker, Lear Corp. (LEA), has lost 49 percent of its value this year.