Daniel Howes

UAW workers may derail Ford's success

Old Detroit lives!

Here, in the week before Ford Motor Co. hopes to maybe, sorta' report encouraging third-quarter earnings, a faction of its United Auto Workers membership is on course to torpedo a revised labor agreement -- proving, yet again, that bankruptcies and painful retrenchments aren't enough to shake some real-world sense into a deeply engrained sense of entitlement.

I mean, who'd have thought that the Blue Oval, still controlled by its founding family, had unwittingly become a 501(c)3 nonprofit corporation masquerading as a struggling titan of Wall Street? Or that some in the UAW mistakenly believe they're "co-determined," in the German corporate sense, to steer Ford's corporate strategy?

Deep into voting on contract terms that include a qualified "no-strike" clause, it's not looking good for FoMoCo right about now. Nor is it looking good for UAW President Ron Gettelfinger and the head of his Ford Department, Bob King, both of whom have their fairly significant credibility strapped to a deal that could go down to defeat.

If it does, what it says about a chunk of the union's rank-and-file will extend far beyond what it means for their employer, now beset with the heaviest debt load and least competitive work rules of Detroit's three automakers. Let me repeat that: Ford, the darling of Motown, now is carrying more debt and less competitive work rules than its rivals.

Rejecting Ford's proposed deal would keep it that way for two more years -- at least. What that says is that too many around here still don't get how precarious Ford's comparatively promising future really is.

They don't get that you can't force unequal terms on competing entities -- in this case, breaking the "pattern" that has bound UAW members together since the days of Walter Reuther -- and expect Ford to compete fairly with rivals from General Motors Co. and Chrysler Group LLC to Toyota Motor Corp. and Honda Motor Co.

They don't understand, despite mountains of available evidence, that anything that undercuts prospective profitability (and, yes, that would include a union contract as much as it would purchasing agreements and dumb management decisions) hits the wallets of hourly workers, too.

It lengthens the time between now and whenever the next profit-sharing checks might arrive. Theoretically, it dampens enthusiasm for growth in Ford shares, which would be used to satisfy a portion of Ford's obligations to the UAW's health care trust fund.

And it bolsters the anti-Detroit argument, aired so effectively during last year's auto bailout hearings in Congress, that too many of this town's auto folks still operate in a parallel universe unhinged from the real world inhabited by the rest of us.

Yes, Ford is picking up market share, a testament to its renewed product line, much better marketing and the undeniable fact that its chief competitors have spent much of the past year on their collective backs, or nearly so. Yes, it is "making money" in the most technical sort of way. But an operating profit in the bellwether U.S. market?

Nope, which is why the animating thought process behind the UAW's "just-say-no" faction seems to be that any profit above break-even -- even if it really is no such thing -- is a reason not to change, even if it comes at their own expense.

To say some folks are rushing things a bit is, well, vast understatement. Ford is on its way to turning the corner, but it's not there yet. And its advantage through much of this year likely will slip as GM, especially, quickens its cadence of introducing new products and its spending of a whole lot more marketing dollars.

Paybacks can be hell.

First, Gettelfinger and King banked on their ability to a) deliver Ford a deal similar to the ones forced on the union at GM and Chrysler that would b) hew to the core "pattern" that defines the union's legacy. But make the case publicly? Naw.

Second, I'm told, the plant-by-plant polling on an indisputably concessionary deal falls smack in the middle of plant-level politicking for local union offices. The contract becomes a ready-made issue.

Third, Ford PR and CEO Alan Mulally spent much of the past year separating the Blue Oval from troubled GM and Chrysler. Between the first hearings last November and the second one a month later, Ford's tone morphed from "we-need-help" to "we're-supporting-our-allies." It repeated, ad naseum, that it "didn't take the money" flowing into GM and Chrysler from the Treasury (even as it did take nearly $6 billion in loans from the Energy Department).

And it clearly telegraphed that its financial improvement -- cost cutting, increased revenue per vehicle, a likely debt refinancing and encouraging gains in market share -- were tracking slightly ahead of projections. The media duly reported the news; Wall Street lapped it up; Ford's shares rose; and the guys on the line watched it all happen.

Yes, paybacks can be hell.

dchowes@detnews.com (313) 222-2106 Daniel Howes' column runs Tuesdays, Thursdays and Fridays