Editorial: Rejection of Ford contract changes may haunt workers
The Detroit News
November 04, 2009 06:03 AM
The Ford UAW workers who -- against the advice of their national leaders -- voted to reject a labor agreement that would have made the automaker competitive with rivals General Motors and Chrysler are taking a chance on the long-term success of the firm -- and thus on the future of their own jobs.
Ford's reports of profits in the second quarter and again Monday for the third quarter may have seemed to make contract concessions on labor costs and work rules a hard sell.
Getting any further relief between now and 2011, when the firm's contract expires, may be difficult with the firm's own projection of full-year profitability in 2011.
But the unhappy fact, for Ford, Metro Detroit and the entire state, is that Ford still isn't out of the woods.
It avoided the bankruptcy proceedings that engulfed GM and Chrysler only by extensive borrowing to sustain its operations. It is to the credit of Ford CEO Alan Mulally and his team that it anticipated the firm's need for credit. But Ford's self-reliance has costs as well as benefits.
As a result of avoiding bankruptcy and a government bailout, it has garnered a good deal of public approval. It has gained market share this year in contrast with its rivals.
Still, Ford, unlike GM and Chrysler, remains highly leveraged. As analysts have pointed out, its second-quarter profits stemmed primarily from its restructuring of some debt, reducing its interest costs. But it is still carrying about $27 billion in debt.
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