Ford has quickly improved its lineup, led by the midsize Fusion and Mercury Milan. It has cut costs, reducing its North American workforce by 45 percent since 2006 according to the Detroit Free Press. It has improved market share while drastically cutting production capacity to better fit the needs and demands of a modern marketplace.

Ford Motor Company says it earned $997 million in the third quarter of 2009, its first operating profit since early '08. "Ford now expects to be solidly profitable in 2011, excluding special items, with positive operating-related cash flow."


The company says it reduced automotive structural costs by $1 billion, for $4.6 billion in total cuts through the first nine months of '09. That's $600 million in cuts higher than Ford expected.

General Motors, which has shrunk perhaps more than any other automaker, since its bankruptcy, may not be too far off from returning to profit, itself. Rumors are that GM also will report it has cut structural costs beyond expectations, and could be on the cusp of profitability by the end of 2009.

Therein lies the rub for Ford. It recently re-negotiated with the United Auto Workers the 2007 labor agreement, asking for the same breaks that GM and Chrysler negotiated under bankruptcy. The UAW's rank-and-file have rejected Ford's renegotiation, and posting a quarterly profit probably doesn't help Ford's position with the labor union. In Sunday's Free Press, business columnist Tom Walsh recalled Ford CEO Alan Mulally's response when asked whether he would cut his salary to $1, like GM's Rick Wagoner and Chrysler's Bob Nardelli.

"I think I'm okay where I am," Mulally replied. He earned $4.9 million in salary bonus and benefits, plus stock options valued at $8.7 million, last year.

Of course, Ford was okay where it was at, last year. It turned down federal loan guarantees -- reserving the right to ask for them later, if necessary. It was the only major American automaker to do so. It already had successfully negotiated extremely low-interest loans upward of $23 billion with lenders like Citigroup (which filed for bankruptcy on the weekend).

Many pundits, especially the more conservative ones, wondered whether Ford would be at a disadvantage if GM and Chrysler received bailouts. Mulally supported what turned out to be a "takeover" of GM and a handover of Chrysler to Fiat, because he understood that letting GM and Chrysler die would be much worse for Ford. By looking like the healthiest man in intensive car, Ford did put itself at a disadvantage, at least with the UAW. Still, even before the GM and Chrysler renegotiations, then-CEO Wagoner said GM's financials would be much improved by 2011, once retiree benefits reverted to the UAW. Now Ford may be in the position of having a labor agreement disadvantage through '11. That's when the UAW will pick one of the three with which to negotiate a new contract. Wonder which Detroit automaker that'll be?

Ford can't, and won't, give up on getting a UAW deal that's on-parity with GM and Chrysler. Even with today's good news, Ford needs this deal to compete on more-or-less equal ground with a potentially resurgent GM. The UAW's management understands the importance of giving Ford the same breaks as Detroit's Other Two. Its rank-and-file had better come to realize its importance, as well.