DEARBORN, MI – Advanced-technology gasoline engines will be a cornerstone of Ford Motor Co.’s near-term plan to improve its lagging fleet fuel economy, the auto maker reveals.

In addition to the debut of a 6-speed dual-clutch transmission and the introduction of direct-injection turbocharging, Ford promises a fuel shut-off system “in a couple of years,” says Derrick Kuzak, group vice president-global product development.

It’s called “deceleration fuel shut-off,” Kuzak tells Ward’s here at a media event to showcase Ford’s ’08 lineup.

“It’s just as simple as that. When the vehicle is decelerating, it shuts off fuel completely,” Kuzak tells Ward’s. “It’s technology we have today. What we’re trying to do is work on every fuel economy gain that we can. (Deceleration fuel shut-off) already is under development, and you’ll see it within the next couple of years.”

Kuzak’s revelations come as federal legislators are mired in standoffs over a proposed mandate that would dramatically hike fleet fuel economy – an area in which Ford has recently performed poorly.

From model-years ’00 through ’05, the auto maker has had the worst – or tied for the worst – U.S. fleet fuel economy behind General Motors Corp., Chrysler Group, Toyota Motor Corp., Honda Motor Co. Ltd. and Nissan Motor Co. Ltd.

The latest data, covering ’06, shows Ford had combined a fleet fuel-economy rating of 19.7 mpg (11.9 L/100 km). Only Chrysler did worse with a rating of 19.1 (12.3 L/100 km).

“We recognize that fuel economy is the most unmet need for customers, and because of that it’s one of our highest priorities,” Kuzak says. “Delivering good fuel economy is about attacking a wide array of technologies – from advanced gasoline engines, clean diesels, advanced transmissions, hybrids and alternative fuels.”

Another core technology for Ford will be its TwinForce engine, which the company says will provide the power of a V-8 with the fuel economy of a V-6 courtesy of direct-fuel injection and twin turbochargers.

A prototype first was shown on the Lincoln MKR concept at this year’s North American International Auto Show in Detroit. A production version of the TwinForce is expected to debut on the Lincoln MKS flagship sedan, set to hit dealerships next year.

“(TwinForce) is a gasoline engine with advanced valve-train technologies combined with direct-injection turbocharging (and) downsized displacement. All of which deliver fuel economy approaching levels of diesel engines,” Kuzak says.

“It’s our intention to introduce TwinForce not only on V-6 (engines), but also I-4 applications on a wide range of engines and vehicles by the ’11 model year,” he says.

Another promising technology is Ford’s “Powershift” 6-speed, dual-clutch transmission.

“Powershift provides fuel efficiency better than a manual transmission with automatic-transmission shifting capability,” Kuzak says.

In addition, Ford will accelerate its adoption of weight-saving electric power-assisted steering systems, as well as advanced battery management technology, to help boost fuel economy.

“Battery management technologies will allow us to manage the electrical levels and battery state of charge better,” Kuzak says. “Our indication is we’ll be leading the industry in the application of electric power-assist steering across a wide range of our vehicles by 2011.

“We have a very expansive plan by 2011 that encompasses gas; diesel; transmissions; alternative fuels; and competitive hybrids, inclusive of expanding ethanol and biodiesel compatibility.”

With this smorgasbord of fuel-efficient technologies, it would appear Ford is poised to become a leader in fuel economy by 2011. However, Ford’s competitors have similar technologies – though the auto maker has spurned solutions such as cylinder deactivation.

Dave Cole, chairman of the Center for Automotive Research in Ann Arbor, MI, tells Ward’s while Ford’s technologies are viable, “I don’t think they will be a critical factor in Ford’s survival…We will be seeing a bunch of related technologies from all of the manufacturers over the next couple of years.”

Rather, he says, Ford’s products will be the key.

Meanwhile, Mark Fields, president-The Americas, gives an optimistic update on Ford’s ongoing North American restructuring strategy as it tries to return to profitability in its home market after a $12.7 billion loss last year.

Ford is on track when it comes to shuttering plants and trimming its work to better align capacity with demand for its products, Fields says.

“Overall, we’re ahead of where we expected to be on things like capacity reductions and consolidating our employee base,” he says, adding that 14,000 salaried and 27,000 workers have left the company so far.

“We’ve done (factory closings and job cuts) in a manner where we kept plants running very smoothly and also with quality, Fields says, noting employee morale is improving, but it’s “not quite where it needs to be. Nevertheless, it’s trending in the right direction and people in the organization are starting to believe.”

Fields points to Ford’s top rankings in five categories of the 2007 J.D. Power and Associates Initial Quality study as proof the auto maker’s fortunes are beginning to shift.

Upcoming products are another cause for optimism, Fields says, as the company strives to have 70% of its lineup either new or refreshed by the end of next year and 100% by 2010.

Fields concedes Ford still faces significant headwinds in its recovery plan, including slow housing starts that have hurt vital F-Series pickup sales, an increasingly competitive marketplace and rising gas prices.

These same economic conditions are causing hardships among Ford’s key suppliers, as well.

“The industry overall is seeing profound change, not just in the mergers and acquisitions that are taking place but also in the market, itself,” Fields says.

He says product mix is on the right track, as the auto maker attempts to wean itself from its dependence on SUVs and trucks that netted record profits in the 1990s and concentrate more on its passenger car and cross/utility vehicle sales.

“In 2004, 30% of our retail sales were cars and car-based utilities,” Fields says. (Through the first five months), “48% of retail sales were cars and CUVs, and in May it was 52%. You can see where the trend is heading.”