Ford on Thursday said it would add six European small vehicles built on its global B-and C-car platforms  to its US line-up and build them in three large truck and SUV plants it would begin retooling from December.

On the same day it announced a US$8.7bn net loss for the second quarter of 2008, due largely to an $8bn asset write-down, the automaker said its core Ford, Lincoln and Mercury ranges would be "almost completely upgraded by the end of 2010" and that it plans to be the best or among the best in fuel economy with every new product in its segment.

It also plans to double hybrid vehicle production and the number of models it offers next year and double North American four-cylinder engine production capacity by 2011.

There had been rumours in US media the Mercury brand - largely more luxuriously trimmed and better equipped versions of Ford brand models - might be axed but this has not happened.

"Ford, Lincoln and Mercury [are] confirmed in company's North American brand portfolio," the automaker said.

"The actions represent a 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 line with rapid changes in customer buying preferences," it added.

As well as bringing European models across the Atlantic, Ford is speeding the introduction of fuel-efficient EcoBoost and new four-cylinder engines.

President and CEO Alan Mulally said: "Ford is moving aggressively using our global product strengths to introduce additional smaller vehicles in North America and to provide outstanding fuel economy with every new product."

The latest moves follow May and June announcements of reduced North American large trucks and SUV production for the rest of 2008, as well as boosted output of smaller cars and crossovers.

"We are transforming Ford's North American manufacturing operations into a lean, flexible system that is fully competitive with the best in the business," said president of The Americas Mark Fields.

"We remain committed to matching our capacity with real consumer demand, and we are equipping nearly all of our assembly plants with flexible body shops, ensuring we can respond quickly to changing consumer tastes.

"In addition, we are adding four-cylinder engine capacity to meet the growing consumer demand, while expanding production of our new EcoBoost engines, six-speed transmissions and other fuel-saving technologies," Fields said.

The truck plant in Wayne, Michigan, which currently builds the Ford Expedition and Lincoln Navigator full-size SUVs, will be converted to production of small cars on Ford's global C-car platform starting in 2010. Expedition and Navigator output will be moved to Louisville, Kentucky, early next year.

The Cuautitlan plant in Mexico, which currently builds F-Series pickups, will be converted to make the new Fiesta small car for North America in early 2010. It is just going on sale here in Europe.

The Louisville plant which builds the Ford Explorer mid-size SUV will also be converted to produce C-car platform models from 2011.

The Twin Cities (Minnesota) assembly plant scheduled to close in 2009 will now make Ford Ranger small pickups to the end of 2011 to meet demand.

And, as previously announced, Kansas City Assembly this year will add a third shift to its small SUV line for the Ford Escape and Hybrid and the more upmarket Mercury Mariner and Hybrid versions.

Ford said it would continue to offer hourly worker buyouts in conjunction with the United Auto Workers (UAW) union "to secure competitive employment levels". It also said it was on track to reduce salaried-related costs by 15% in North America by 1 August.

It reiterated in its financial results today that Ford North America still expects to reduce annual operating costs by US$5bn by the end of 2008 compared with 2005 and plans to continue to reduce structural costs beyond 2008.

Confirming that Ford, Lincoln and Mercury brands would all remain on sale, Ford said it would, however, work with dealers on more consolidations, "adjusting" the network to reflect changing industry sales and model mix.

The automaker said it expected US economic recovery to begin by early 2010 with industry sales returning to trend levels as the economy returns to health.

"Product mix changes are permanent, but some recovery will occur from the current share-of-industry for full-size pickups - though not back to levels experienced previously - as the economy and housing sector recover," it said, adding that oil prices are seen to remaining "volatile and high".

Other US market product updates include a redesigned 2009 Ford F-150 full-size pickup; updated 2010 Ford Fusion, Mercury Milan, Lincoln MKZ sedans on sale in early 2009, with the Fusion's and Milan's four-cylinder fuel economy expected to top the rival Honda Accord and Toyota Camry; redesigned 2010 Ford Fusion Hybrid and Mercury Milan Hybrid models starting production late this year and on sale in early 2009 with fuel economy expected to top the Toyota Camry hybrid.

There will also be a redesigned Ford Mustang line in early 2009 and a redesigned Ford Taurus sedan with EcoBoost engine in mid-2009.

The European Transit Connect small van arrives mid-2009 and a new Lincoln seven-passenger crossover - with EcoBoost engine - also in in mid-year.

More Europeans arrive from 2010 - the new Fiesta in both four-door sedan and five-door hatchback versions -  early in the year, followed by the redesigned Focus, again in four- and five-door forms. Mercury will also get a new small car in 2010.

Ford is also promising another new European small vehicle that will be a 'whitespace' [new segment] contender.

A redesigned Ford Explorer - with unibody instead of body-on-frame construction, EcoBoost, six-speed transmission, weight reduction and improved aerodynamics for up to 25% better fuel economy - is also due in 2010.

Ford said would build more than 1m vehicles a year worldwide off its global B-car platform and nearly 2m units off its global C-car platform in the next five years.