'There's almost too much good news' from Detroit
Ford Motor Co.'s $1 billion third-quarter profit has opiners saying the darndest things. Try this from Paul Ingrassia, former Detroit bureau chief of the Wall Street Journal:
"In fact, there's almost too much good news coming out of Ford's Dearborn, Mich., headquarters these days," Ingrassia writes in the Wall Street Journal.
And good news can often mean bad news for Detroit's automakers, as Ingrassia makes clear. But first the good stuff.
What is Ford doing right: Shedding brands, getting out of the mortgage business and concentrating on improving quality. Now the Dearborn automaker has 90 percent of its models with average or better quality -- "right up there with Honda and Toyota."
But Ingrassia appropriately notices that Ford's good fortune tempted the rank and file to reject concessions the UAW already had given Chrysler and General Motors in the bankruptcy process.
This is bad because Ford still needs to pay off $27 billion in debt that it accrued to replenish its vehicle development and stay out of government control. And by keeping in place too many job classifications, Ford still is carrying around union "feather bedding," according to Ingrassia.
Interestingly, Ingrassia reports that two high-quality Ford vehicles that beat their Japanese counterparts in quality (according to Consumer Reports) are made in a Mexican plant without job classifications that the UAW doesn't represent.
"If Ford targets future expansion in Mexico, the recent contract vote will spell further decline for a union that, like Detroit's car companies, badly needs cultural change," Ingrassia writes.
