Just when it looked like things might be going right at Ford (NYSE: F), it may be going wrong again. The company, which reported a better third quarter than Wall Street expected, said that a bad U.S. economy might drive sales down and force the company to cut production on some vehicles. The No. 2 car maker has faced double digit sales declines in most of its monthly reports this year.

In statements picked up by Reuters, Ford CEO Alan Mulally said, "The business environment has clearly gotten tougher. It's gotten tougher and we want to be ready to move if we need to."

The comments cannot hearten the UAW, which just gave Ford a nifty new contract. Lower production and idling of plants generally means layoffs. The UAW may have won a big battle, but part of the war now still appears to be ahead.

Ford has reached an interesting tipping point. If it is going to compete with other large car companies in the U.S., it needs to have a full line of cars and light trucks. It also needs to have the capacity to increase production when the markets begin to improve. Ford may cut more workers, layoff more managers, and stop production at more facilities. But at some point, it is only half a car company by size. And that means an end to Ford as it has been known for almost 100 years.

Douglas A. McIntyre is an editor at 247wallst.com.

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