One of the things that surprised Alan Mulally when he moved from the aerospace industry to run Ford Motor Co. was the huge number of options for cars and trucks that drove up manufacturing costs.

For instance, the Lincoln Navigator large sport utility vehicle had 128 possible console combinations, he told the Morgan Stanley Global Automotive Conference in New York on Wednesday.

"I've just never seen the complexity that we have in the car business and the variation we have with every car," the former Boeing Co. executive said during a question-and-answer session with industry analysts.

But in the past 1 1/2 years, he said, Ford has worked to reduce complexity and has done so by up to 80 percent on some models.

The resulting savings are part of the larger plan to remake Ford by shrinking it to match the reduced demand for its products in the United States and by taking advantage of its huge global size to reduce complexity and costs, he said.

"You can imagine what that means to the cost structure worldwide," he said.

Mulally also conceded that the company fell behind the competition in fuel-efficient engines and transmissions, but said it is catching up with its new EcoBoost line of four- and six-cylinder direct-injection turbocharged engines.

Ford has said EcoBoost can deliver up to 20 percent better fuel economy and a 15 percent improvement in emissions without compromising driving performance. It is also promoting the engine as a less expensive alternative to hybrids and direct-injection diesels.

The automaker hopes to put EcoBoost engines on 500,000 vehicles annually by 2013.

"It's absolutely going to be a competitive advantage," Mulally said.

He also said Ford will make money selling small cars in the United States because its globalization efforts will allow it to build more cars on the same underpinnings worldwide, reducing costs.

But he conceded that Ford's market share in trucks and sport utility vehicles has slipped recently, which he attributed to competition.

Mulally also told the analysts that Ford would invest the proceeds from selling its Jaguar and Land Rover brands in quality and product development at Ford.

The company could announce sale of the two brands to India's Tata Motors Ltd. by the middle of next week. Ford won't reveal the purchase price, but people briefed on the negotiations have said initial bids ran from $1.5 billion to $2 billion.

Ford has mortgaged assets to continue operations and expects to burn up $12 billion to $14 billion until 2009, when it plans to return to sustained profitability.