Ford Motor Co., which lost $8.7 billion in the second quarter of this year, announced a dramatic speed-up of its revitalization plan yesterday, including converting three of its truck plants to building small cars, and the addition of six European Ford products to the United States.

A highlight of yesterday's presentation was the announcement that Mercury, a brand that many people thought would be killed, actually is a key part of Ford's revitalization effort.

The announcement came in a conference call from the company's Dearborn, Mich., headquarters, a call that also included Ford's second-quarter earnings.

Ford shares fell 92 cents, or 15 percent, to $5.11.

"We are accelerating the development of the new products that customers want and value," Ford's President and Chief Operating Officer Alan Mulally said. "We sell some of the best vehicles in the world in our profitable European and Asian operations, and we will bring many of them to North America on top of our already aggressive product plans."

As a sign of the shift from focusing on trucks and SUVs to smaller cars and more fuel-efficient vehicles, Ford will focus two-thirds of its spending on developing cars and crossovers by the end of 2010. That's a sizable shift for the automaker, which now spends half of its budget on such vehicles.

Taking a gamble

Analysts say the automaker is rolling the dice with its latest plan, and one of the biggest gambles could be its idea to sell six products from its European Ford lineup in North America. Four of the products would be built here, one would be built in Mexico, and one in Europe.

The company has tried in the past to sell European cars in the United States, such as the Ford Fiesta from 1976 to 1980, which was successful, as was the Capri, a small European sports coupe sold by Mercury in the 1970s. But the Merkur, a German luxury sports coupe and sedan sold by Mercury from 1985 to 1989, was considered a failure.

Moreover, there's evidence that bringing in European products with American nameplates can be troublesome. Saturn, a GM brand, recently introduced the Aura, which was hailed as a comeback for GM and the Saturn brand. But sales of the Aura have been disappointing.

Mark Fields, Ford president of the Americas, said times and attitudes have changed.

"What's really different today than ever before is the fact that fuel prices in the U.S. are up, and consumers really value small, fuel-efficient vehicles."

Reasons for hope and concern

Industry watchers consider European Fords to be better handling, sportier and better looking than their American counterparts.

"Anecdotally, I would say that many people have asked, 'Why don't they bring over those nice Ford cars from Europe?" said Tom Libby, senior director of industry analysis for J.D. Power and Associates' Power Information Network.

Rather than just importing the European models, Ford's plan calls for building the bulk of them in North America.

"That was an issue with most of the European products brought here before. If the cars are brought here from Europe, there's not a lot of agility and flexibility if there's a sudden change in buyer demand and in supply of the cars," Mr. Libby said. "So I think Ford's plan is feasible."

He and other analysts cautioned that Ford's European products "need to be priced competitively."

Ford also is betting that consumers' shift to small cars is a permanent one -- and analysts aren't so sure about that.

Still, the automaker said there is a long list of circumstances that could throw a wrench into its recovery plans. Those potential problems include continued decline in market share, a significant decline in the U.S. auto industry and fluctuations in currency or commodity prices.

Going small

Ford's huge second-quarter financial loss comes after having earned $750 million during the same period last year. As analysts expected, the loss was the result of the challenges facing the industry: huge increases in gas prices and the resulting turn away from SUVs and trucks, long Ford's bread and butter.

As part of the revitalization plan, Ford is doubling its plant capacity to produce more than 1 million four-cylinder engines in North America by 2011, and the company is doubling its hybrid offerings in 2009, with additional hybrid products likely after that, company officials said.

Currently, the only two available hybrids are the Ford Escape small SUV and the similar Mercury Mariner. Hybrid versions of the intermediate sized Ford Fusion and Mercury Milan will be introduced next year.

The company also plans to convert its truck plant in Wayne, Mich., to small car production in 2010. Ford's Explorer, which once was a big seller but has suffered huge drops in sales, will make a dramatic shift from being a truck-based product to unibody or car-based one. That will in essence make the Explorer a crossover. Ford said it could improve fuel economy by up to 25 percent through better aerodynamics, weight savings, the use of a six-speed automatic and the addition of Ford's EcoBoost V-6, which gives the performance of a V-8 with better fuel economy, officials say. The new generation Explorer will arrive in 2010.

A truck plant in Louisville, Ky., also will switch to smaller cars starting in 2011. A third truck plant in Cuautitlan, Mexico, will build the Fiesta starting in 2010.

Meanwhile, the Ranger compact pickup truck, which has been largely unchanged for years, got a two-year lease on life. A Minnesota assembly plant that now makes the Ranger will continue to do so through 2011.

Mercury is back

The rebirth of the Mercury brand comes as a surprise to industry observers and analysts because no new products had been announced for the line, prompting growing anxiety among Lincoln-Mercury dealers and a near certainty among many people that the brand would soon be phased out.

But instead, Ford plans to give Mercury a new small car in 2010.

Other product plans include:

• A new Lincoln seven-passenger crossover in 2009. Industry sources say it will be based heavily on a concept vehicle that was shown at the North American International Auto Show.

• A European Ford Fiesta in a sedan and hatchback versions in early 2010.

• A new European Ford Focus in sedan and hatchback versions in 2010.

• Adding a European small van known as the Transit Connect to its North American portfolio in mid-2009.

• An all-new Ford Mustang in coupe, convertible and glass-top versions in early 2009.

• An all-new Ford Taurus sedan with an EcoBoost engine and more advanced safety and convenience technologies in mid-2009.

• New 2010 Ford Fusion, Mercury Milan and Lincoln MKZ sedans with four-cylinder engines for better mileage than Honda Accord and Toyota Camry.