Although the heated battle this week between the United Autoworkers Union and General Motors Corp. (NYSE: GM) was more than enough distraction for the Detroit automaker, GM finally admitted that it make vehicles -- not health plans -- but it will make nice and compromise anyway. For a company still struggling to return to consistent profitability, it needs to get back to making vehicles.

Competitor Ford Motor Co. (NYSE: F) stated this week that the deal cut with GM may not be enough for it in terms of cost cuts. Ford is in worse financial shape than GM at this time, something very well known to UAW president Ron Gettelfinger. In fact, Gettelfinger stated that the GM deal worked on this week will be a rough template for deals with Ford and the Chrysler group. But, with Ford needing cuts that go deeper than GMs, the template may need major modifications when Ford's time rolls around.

Although reports state Gettelfinger will take Ford's current status into account when both parties sit down at the negotiating table, Ford CEO Alan Mulally will require it. Mulally says that no deal will be accepted by Ford that doesn't make the automaker fully competitive with overseas rivals. Its goal: cut labor costs in the U.S. by 30%. If we think the UAW / GM deal was intense, the feathers will really fly when Ford sits down at the lead chair soon.

Of course, David Cole, chairman of the Center for Automotive Research, said that "The last thing the UAW wants to do is jeopardize the future of Ford ... they'll get some modification that fits the situation." Ford's 2006 annual loss of $12.6 billion will require on heck of a modification to any new agreement, that's for sure.

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