On Thursday, August 14, Ford began production of the new Fiesta, a small car destined for global sales and meant to serve as a blueprint for future product development.

Ford, facing losses of $8.7 billion during the second quarter, is looking to reduce both manufacturing and development expenses for all its worldwide operations.

The use of a global platform helps bring down development expenses and purchasing outlays while still allowing for the flexibility of varied interior and exterior treatments. Ford envisions constructing a million vehicles a year based on the Fiesta platform.

The Fiesta, first introduced in 1976, sold well in Europe for the ensuing three decades and is currently being built at the company's facility in Cologne, Germany.

Approximately $718.4 million have gone into retooling the operation in Cologne with an expected output of 148,000 Fiestas in 2008. At full production the plant will turn out 1,900 Fiestas and fusions over three daily shifts.

The Fiesta will be vital to Ford's sales in North America as the company struggles with top competitors including the Toyota Yaris, Honda Fit, and Nissan Versa.

Given the high cost of gasoline and growing environmental concerns, small cars are expected to be in even higher demand in the coming months and all major automakers are scrambling to meet the rapid shift in consumer preference.