Meltdown 101: Ford Has Suffered Less Than Rivals

Ford and the United Auto Workers union agreed in October to contract changes that would bring Ford's labor costs in line with GM and Chrysler. But the UAW has had trouble getting Ford's 41,000 UAW members to agree to further concessions, in part because workers view the company as healthier than its Detroit rivals.

Ford workers have overwhelmingly rejected contract changes that would have allowed the automaker to cut labor costs, leaving Ford at a disadvantage to its Detroit rivals as it continues its struggle to return to profitability. The United Auto Workers union had given local unions until Monday to complete voting, but a person briefed on the voting said Saturday that the contract changes have been rejected by large margins.

Q: What other issues could hurt Ford's turnaround?

A: Ford had $26 billion in debt at the end of the second quarter, and has been unable to cut costs as deeply as GM and Chrysler were able to do in bankruptcy. Ford also has said its return to profitability relies, in part, on a recovery in U.S. and European sales, but it's unclear how quickly those markets will turn around.

Customers' continued shift away from profitable sport utility vehicles and pickups to lower-margin small cars also is a continuing challenge.

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