Networks Steer Ford Stories to 'Hard Times,' Ignoring Other Firms on Track

     The offer of wide-scale buyouts at Ford Motor Co. (NYSE: F) gave networks news shows a new excuse to claim – falsely – that the U.S. auto industry is “now struggling to survive.”


     NBC’s report was even headlined “Hard Times,” which movie fans will catch as an un-subtle reference to a 1975 film about struggles during the Great Depression. But things aren’t that bad for the entire auto industry; just for the Big Three – Ford, GM (NYSE: GM) and Daimler-Chrysler (NYSE: DCX). A February 13 BusinessWeek article told “The Good News About America’s Auto Industry.”


     According to that piece, “Look past the trouble in Detroit, and the auto industry is anywhere but in decline. In a growing number of Southern hamlets such as Canton, Toyota (TM ), Honda (HMC ), Mercedes and other foreign car manufacturers are providing nonunionized jobs – 33,000 since 2000 – that pay almost as much as United Auto Workers earn farther north.”


     But the networks focused almost entirely on Ford. NBC anchor Brian Williams introduced his story by saying Ford “has made a change that will change the way business is done by doing away with tens of thousands of unionized workers.” Ford is “doing away” with those workers by offering them buyouts worth up to $140,000 each.


     The company has been battling high union wages and benefits along with foreign-owned competition like Honda and Toyota. But neither of these explanations figured prominently on the September 14 evening news shows. BusinessWeek explained that foreign-car companies’ employees here in the United States earn a bit less and have slightly less in benefits. But that adds up. One area of major difference is retirement. Nissan, for example, uses a 401(k) instead of a defined benefit plan like Detroit’s autoworkers.


     Both CBS and ABC admitted Ford needs what CBS’s Anthony Mason called “radical surgery to survive.” And all three networks talked about how the company’s sales had gone down. On ABC’s “World News with Charles Gibson,” reporter Dean Reynolds had a partial explanation: “Heavily invested in gas-guzzling SUVs, at a time of high pump prices, its sales have plummeted.”

     But both foreign competition and the huge cost of salaries and benefits for Ford’s union labor received attention only at NBC.

     NBC’s Reynolds described Ford as “pummeled by high gas prices and fierce foreign competition, particularly from Toyota.” He made only a passing reference to the benefits crisis Detroit’s manufacturers have been coping with: “It gives them breathing space and hopefully a more predictable issue dealing with the funding of pensions and health care.”

     Recently, the story of American automotive success has come from companies like Toyota and Honda. Toyota moved into the No. 3 spot in American auto sales and “continued to take market share from other automakers last month, posting an industry-best 17 percent increase in sales,” according to the Associated Press.