You have to build them as a squad, by researching squad tech. You can't combine loose units into single unit squads, unfortunately.

Well, I don't think you *should* be able to place loose units into a squad, that weren't built as such. Squads are very potent units, that have to be researched, and paid for in resources and training time.

*However*, it does seem to be an issue that there is no good way to retrain or heal squadded units that have lost members, that I have found.  Doesn't mean there isn't a way, just that I haven't found it, and documentation is sparse. Once you've put the effort into training a unit, there should be a way to get it back up to full strength.

I haven't tried it but I know you can park a unit in a city it heals up.  Are you saying if a Squad is down one unit, parking it in the city will not heal that unit back to four units? 

In that case I'm amusing parking in a city will heal the last unit left alive with current hit points on the squad.  If that make sense.  Can anyone confirm? 

Again then I would look forward to a option where you can add one unit to a squad of 3 to replenish the ranks.

Awesome, thanks for the confirmation Tomas.  Add to master fix list.