Coinciding with news of an $8.7 billion second quarter loss, Ford also announced today its latest North American restructuring plans and future product developments for the Ford, Mercury and Lincoln brands. The biggest impact is the considerable shift in Ford’s North American product plans and investments toward smaller vehicles and fuel-efficient powertrains in both the near- and mid-term in response to changing demand.

In addition to bringing six small vehicles to North America from Ford’s European lineup, the company is also accelerating the introduction of fuel-efficient EcoBoost technology (turbocharging and direct-injection)and all-new four-cylinder engines, boosting hybrid production and converting three existing truck and SUV plants for small car production as early as December.

Entire lineup revamped by the end of 2010

By the end of 2010, Ford expects that two-thirds of its spending will be on cars and crossovers – up from one-half today. Ford will also bring six of its European models to North America by the end of 2012. Furthermore, the entire Ford, Mercury and Lincoln lineup will be almost completely upgraded by the end of 2010.

Some of the European models will include the new Transit Connect small MPV by mid next year, the recently revealed Fiesta (both four and five-door versions) in early 2010, the next-generation ‘global’ Focus (both four and five-door versions) by late 2010, and another compact vehicle that’s yet to be announced.

The next-generation F-150 pickup will arrive later this year, and will be followed by an updated Ford Fusion, Mercury Milan and Lincoln MKZ early next year. Both cars will also be available with new hybrid options, and are expected to top hybrid versions of the Honda Accord and Toyota Camry in fuel economy.

The facelifted Mustang will go on sale early next year and will be followed in the middle of the year by the all-new Ford Taurus sedan complete with an EcoBoost engine. Also planned for next year is the introduction of a new Lincoln seven-passenger crossover with EcoBoost technology.

In 2010 a new small car will be introduced for Mercury as well as the next-generation Ford Explorer. The new SUV will feature unibody construction as well as an EcoBoost engine and six-speed automatic transmission. Fuel economy should be improved by 25% compared with the current model.

Each new model expected to be segment leader for fuel-economy

With every new product, Ford expects to be the best or among the best for fuel economy. This is aided by one of the most extensive powertrain upgrades ever for Ford. By the end of 2010, nearly all of Ford’s North American engines will be upgraded or replaced. In addition, within two years, nearly all of Ford’s North American lineup will offer fuel-saving six-speed automatic transmissions or be available with an optional PowerShift dual-clutch unit. Furthermore, Ford will offer EcoBoost on more than 80% of its North American lineup by the end of 2012, and capacity for North American four-cylinder engines to more than one million units by 2011.

In addition, Ford plans to double its hybrid volume and offerings next year with new models such as the Fusion and Milan hybrids.

Ford is also planning significant changes to its North American production plans for large trucks and SUVs for the remainder of 2008, as well as increasing production of smaller cars and crossovers.

Major manufacturing realignments planned

Among the manufacturing realignment actions, the Wayne plant in Michigan, which currently builds the Ford Expedition and Lincoln Navigator SUVs will be converted to build the new global Focus this December. Production of the Ford Expedition and Lincoln Navigator will be moved to the Louisville plant in Kentucky. This plant will also be used for the Focus.

The Cuautitlan assembly plant in Mexico, which currently produces F-Series pickups, will be converted to begin production of the new Fiesta small car for North America in early 2010. The Twin Cities plant in Michigan, which was scheduled to close later this year, will continue production of the Ford Ranger through 2011 and the Kansas City plant will add a third crew to its small utility line for the Ford Escape, Escape Hybrid and Mercury Mariner and Mariner Hybrid.

Finally, Ford will continue with its cost cutting measures including more hourly buyouts and a 15% reduction in salaried jobs. Management expects to reduce annual operating costs by $5 billion by the end of the year, and plans to continue to reduce structural costs into the near future. The company also confirmed Ford, Mercury and Lincoln will remain in its North American brand portfolio.