VIDEO: Ford Verve Concept

While the Verve debuted at the Detroit Motor Show nearly six months ago, this week's restructuring announcement provides an opportunity to delve deeper into what Ford will bring to market for the embattled Mercury brand.

Follow this link for more photos and details on the Verve.

Ford announces revamped lineup, reports $8.7 billion loss in second quarter of 2008

In their quarterly earnings report, Ford announced today that its operations lost $1.3 billion in rising production costs during the second quarter. While sales produced $258 million, over $8 billion in losses and devalued assets produced a flood of red ink.

All told, Ford lost $8.7 billion for the second quarter of 2008, making this the worst quarter in the company's history.

Yesterday, we reported that the Mercury brand will be infused with a large percentage of vehicles drawn from Ford's European offerings. Following the grim financial news this morning, Ford released new details on the company's revamped product line.

• Michigan, Kentucky and Mexico plants to retooled:
Beginning in December, the company will retool the Wayne, Michigan plant to build a new sedan bred from the European Focus platform. Production of the Ford Expedition and Lincoln Navigator - rumored earlier to be on the chopping block - will be moved to the Fayetteville, Kentucky plant early next year.

In 2011, the Louisville, Kentucky plant will retool from Ford Explorer production to more intermediate and compact sedans.

The third plant — which went unnamed in yesterday's report — to shift to car production will be in Cuautitlan, Mexico. The plant currently builds the F-series pickup, will build the new Ford Fiesta hatch in early 2010.

Bucking the trend, the Ford Ranger compact pickup has received a stay of execution. Previously, Ford announced that production would end in 2009; the company announced today that the Minnesota plant which builds the Ranger will continue production through 2011.

• New product plan to eliminate redundant platforms:
As reported by Automotive News Daily, Ford confirmed the following products in development:

2009:
• Ford will introduce a version of the European Transit Connect small van.
• Lincoln will receive a seven-passenger crossover, likely to be based on the Mazda CX-9 crossover.

2010:
• The European Ford Fiesta will debut in sedan and five-door hatchback versions. The Mercury division will receive their own as-yet unnamed model based on the new Fiesta.
• The US Ford Focus will switch to the European market platform in sedan and five-door hatchback models.

Late 2010, 2011:
• A uni-body version of the next-generation Ford Explorer will arrive. In addition to new drivetrain and
significant weight reduction, the new model will improve fuel economy by as much as 25 percent.

In addition to the new platforms, Ford announced it will accelerate development of its EcoBoost engines, which will replace the venerable "modular" V8 engine range with a series of smaller displacement, turbocharged and direct injected V6 mills.

• Hourly worker buyouts to continue:
In addition to the overhauled product range, Ford said it would continue to offer targeted buyout plans to hourly workers at its US plants. The company said it is on track to reduce their salaried worker costs by 15 percent — most of which will come through attrition — in the US by August 1st.

Trading on today's news weighed heavily on Ford; company stock fell by 15.3 percent to close today at $5.11 per share.

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Fleet-footed once more, Mercury will lead Ford's transition with new cars from European market

It is no secret that the auto industry has been hit hard by the double whammy of high gas prices and soaring inflation. Amidst this bad news, Ford's Mercury division appeared to be wilting much the same way that Chrysler's Plymouth brand did a decade earlier.

The lack of investment in new vehicles was readily apparent by 2007. While Ford CEO Alan Mulally insisted last fall that Mercury was not circling the drain, news leaked that suppliers had stopped renewing their contracts and that no new vehicles had been planned beyond 2012.

At the time, Ford had just sold Jaguar and Land Rover to Indian automaker Tata Motors for $2 billion, barely breaking even on their investment to rescue the iconic British marques from the clutches of then ailing British Leyland.

In poker parlance, the fire sale of Jaguar and Land Rover was a tell. A desperate move amidst a tidal wave of red ink.

But it appears that rumors of Mercury's death were greatly exaggerated.

The New York Times has reported that Ford will revitalize the Mercury brand with an entirely new model range, drawn increasingly from Ford's European offerings. An official announcement is expected tomorrow morning as the automaker releases their quarterly earnings report.

The move is similar to General Motors' strategy to redefine the Saturn division as the US line for their European models. The strategy has paid off so far; as sales of trucks and SUVs have flat-lined, demand has risen for smaller cars. The Saturn Astra - itself a rebadged Opel Astra from GM's European division - has been selling a pace the outgoing ION sedan could never match.

As a part of the shift in product strategy, Ford is expected to make permanent cuts in truck and SUV production. According to the New York Times report, three plants will be retooled for car production -- the Wayne, Michigan plant (which builds the Ford Expedition and Lincoln Navigator) and the Louisville, Kentucky plant (which builds the F-250 and F-350 pickups).

The location of third plant chosen for retooling has not yet been released. Besides Kentucky, Ford builds trucks and SUVs in Dearborn, Michigan, Kansas City, Missouri and Cuautitlan, Mexico.

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