Ford Motor Co (NYSE: F) signed an agreement with the UGT Union in Spain today, according to the Associated Press. The agreement will allow Ford to build three new small- and mid-sized cars in its Almussafes plant in Spain, with an annual production target of 350,000 cars. The union has agreed to keep labor costs low in effort to keep the plant competitive with its European rivals.

The announcement comes at a time when automakers are doing everything they can to expand their global operations outside of the United States.

Chrysler (NYSE: DAI) joined Ford (NYSE: F) and General Motors (NYSE: GM) today when it proposed to divest its non-core assets. It is looking at divesting Chrysler Transport, which manages deliveries of supplies to Chrysler plants, and its Mopar unit, which makes high-performance and specialty auto parts, people familiar with the matter told the Wall Street Journal (subscription required).

Obviously, the United Auto Workers oppose the divestitures. It is unclear if the divestiture of the assets will be part of the final agreement between the UAW and the newly independent Chrysler.

In addition to the potential non-core asset sales, the company already has a restructuring plan that calls for 13,000 jobs cuts and a return to profitability next year.

The UAW's talks with Chrysler have also revolved around the auto maker receiving a concession on health care costs, similar to what Ford and GM received back in 2005. Chrysler also wants to outsource non-core employees to a third party, similar to the agreements Ford currently has with UAW locals at individual plants.

The UAW now faces a battle at each of the three major Detroit automakers. The contract between the UAW and Chrysler expires on September 14.

Cerberus Capital Management may sell some of Chrysler's non-automotive units, according to Bloomberg. The units in question are Mopar, Chrysler's famous service and parts producer, and Chrysler Transport, which manages deliveries to the automaker's plants.

Cerberus assumed 80% ownership of Chrysler from DaimlerChrysler (NYSE: DAI) on August 3. Cerberus is now engaged in contract talks with the United Auto Workers as it looks for ways to cut costs. The union is reportedly opposed to the sales for fear of job losses; the units employ roughly 1,300 unionized workers. Chrysler's four-year contract with the UAW expires on September 14.

Analysts are saying that the sale of the units would allow Cerberus to focus on Chrysler's core business of making cars and trucks, and help raise much-needed cash. But Mopar is hardly a peripheral unit. Chrysler has been using the term to refer to its parts since the 1920s, and Mopar has long been virtually synonymous with the automaker. This is especially true when it comes to high performance cars, including the famous muscle cars of the 1960s and 1970s -- the Barracuda, the Super Bee, the Road Runner -- that Chrysler is trying to revive. So you have to wonder if this is a good move in the long run. Let's hope that Chrysler doesn't lose what makes it unique and desirable to car lovers as it works to return to profitability.

I just got back from another round of cyber car shopping, which is the only way I can afford to shop for cars right now, and there's something I think you should know about. The Dodge division of DaimlerChrysler AG (NYSE:DCX) has pulled out all the stops for 2007. When I got a look at the 2007 Dodge Challenger, I just about fell off my chair. It seems that the design crew over there got the message that I want to see some retro car designs. Well friends, they sure did it in top shelf style!

The 2007 Dodge Challenger is a high temp, true-to-style muscle car. This puppy IS your daddy's Mopar. Fully streamlined to meet today's air flow standards, the designers took the classic "E-line" highback rear quarter and blended it forward through to the recessed grille flanked by quad round headlights. Oh baby, round headlights, I must be in heaven! Then, as if that wasn't enough, they nicely added dual ram air ports on the hood. I can only hope that those hoodscoops are functional and that they'll make it onto the final production models.

Now, understand that the pictures Dodge gives you of the Challenger on their website are of the concept car. But if history serves as pattern, the production model, which was just green-lighted for production, will be close to the concept model. I keep flipping back to those pictures as I am writing this piece. Honestly people, this car is a treat for the eyes.

Flanked by such quality offerings as Stratus, Charger, Nitro and Ram, the Challenger will fill a sweet spot in Dodge's current lineup. I was unable to ascertain the exact price range but I'll guess that Challenger is going to slip into the $30,000 range. That's only a guess, and I'm hoping it's a bit high.

All the big analysts are saying that American car manufacturers are out of the running when it comes to market share. I don't see it that way. Yes, times are tough in the auto industry here in the states but it's not because of a lack of quality, innovation or design. If we don't want to see further degradation in the American auto industry and its labor force, it's going to come down to one simple issue. To be blunt, the labor unions had better get their heads out of their, umm, tailpipes and return profitability to the domestic auto manufacturers or frankly, those unions will soon be on the outside looking in and their rank and file members will be wondering what happened.

But that's just my opinion.