Ford faces competition; bankruptcy gives rivals benefits

— -- To compete against the reorganized and streamlined GM and Chrysler, Ford will need to achieve the same sort of cost-cutting. But the nation's second-largest automaker will have to make them without the benefit of having a court order behind it. Issues include:

•Labor. Ford will seek additional concessions from the United Auto Workers to try to match givebacks handed to General Motors and Chrysler as both plunged toward bankruptcy.

"Our goal is not to be disadvantaged," Ford spokesman Mark Truby says. "We're going to go back and negotiate aspects (of the contract) with the UAW."

UAW spokesman Roger Kerson said Monday that the union had no comment.

Ford would be "fools not to go back to the union and say, 'Why don't you give us the same deal as you gave (them)?' " says Rebecca Lindland, director of IHS Global Insight's automotive practice.

The UAW acceded to Ford's requests on several fronts as recently as March. At the time, Ford proclaimed it would save $500 million a year and would have labor costs on par with foreign firms making cars in the Americas.

But that was before GM and Chrysler went into bankruptcy-court reorganization and sought even more givebacks from the union.

•Dealers. Ford has 3,700 dealers, 16% fewer than at the start of 2006. Dropping dealers is difficult because they're independent businesses.

But it's much easier for GM and Chrysler in bankruptcy court. Chrysler has told 789 dealers that they will be gone by June 9. GM sent letters to 1,100 recently telling them they will have to give up their franchises next year.

•Debt. Ford stayed out of Chapter 11 by seeking additional capital before the recession took hold. But it now owes $25.8 billion at a time GM and Chrysler are improving their balance sheets. As of March, Ford had $21.3 billion in cash.