Ford stripped "truck" from the name of one its Detroit-area plants as it announced plans to build its next-generation Focus there, including a battery-electric version Ford expects will run up to 160km without using fuel or emitting greenhouse gas.
While Chrysler LLC sells assets in a New York bankruptcy court, and General Motors works around the clock on ways to cut labour costs and debt before a government imposed deadline, Chairman Bill Ford Jr. and CEO Alan Mulally announced plans to invest $550m to retool the Michigan Truck plant so it can make small cars it will sell worldwide.
"In the worst of times worldwide, we're here today to celebrate a plan to profitably grow Ford," Mulally said.
"We're fighting for the soul of manufacturing in the United States of America and worldwide."
Mulally said that the Dearborn, Michigan-based automaker would build more than 2 million vehicles a year on its small C-car platform globally.
The retooled facility, which once built hefty sport utility vehicles like the Lincoln Navigator and is now called the Michigan Assembly Plant, will build Ford's next-generation Focus, expected to roll off the line next year.
Those cars will be sold globally.
The plant will also build a new battery-electric version of the Focus for the North American market in conjunction with battery maker Magna. That vehicle is expected to debut in 2011.
"We're building the highest tech vehicle in our fleet here in Michigan," Ford said.
"It going to be a critical step toward the commercialisation and ultimately the acceptance of electric vehicles."
The plant that once helped Ford's profitability, is expected to do the same with the Focus, Mulally said.
The struggling carmaker, which lost $1.4bn in the first quarter, said roughly 3 200 jobs will be created in Michigan because of the plant conversion and will reopen late next year.
Mulally said that Ford's restructuring efforts are "on track" as the company has cut labour costs, debt, and is adjusting its manufacturing operations to meet consumer demand.
Ford said it will also consolidate operations at its Wayne Assembly plant and transform two other truck and SUV plants - Cuautitlan Assembly in Mexico and Louisville Assembly in Kentucky - as part of the retooling.
Ford is the only US automaker not taking any government aid, but it has talked to President Barack Obama's auto task force regarding suppliers who are ailing as GM and Chrysler halt production and face running out of cash.