Ford has released its financial results for the second quarter of 2008. In the 12 weeks between April and June, it managed to lose $1.38bn. And in order to keep its books in trim, it decided to reduce the value of its assets in North America by $5.3bn.

The company admitted that the $8.7bn loss was the biggest quarter plunge into the red in Ford's history. It wasn't all bad news. Ford Europe doubled profits to $582m and Ford did well in Asia and South America. Volvo, though, lost $120m.

Ford boss Alan Mulally said he expected the US economy to pick-up in 2010 and that the Blue Oval has $38 billion in ready financing to keep it going through this serious downturn.

The company also says that it expects the shift from big SUVs and trucks ­- the sort of cars that used to make huge profits for Ford - to become a permanent feature of the US market. It sounds bad. But Ford also had a compelling story to tell about how it expects to get out this fix.

By 2010 ­ just as the upturn is expected ­ Ford will have launched the new Fiesta and current Focus in the US. In the same year it also promises a new 'whitespace' small vehicle: my guess is a small SUV based on the Fiesta. Indeed, so dramatic is the dash for frugal models, Ford's plant in Wayne, Michigan will shift from building the giant Ford Expedition and Lincoln Navigator SUVs to building Focus-based vehicles.