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Ford (F) Motor and the United Auto Workers union reached a tentative agreement Saturday, which if approved by it members, should help Ford to become more competitive as it tries to gain back market share in the U.S.

For was by far the weakest of the big three U.S. automakers, losing over $12 billion last year. It's even had to mortgage its blue logo to help fund its turnaround strategy. Its current market share in the U.S. has plunged from 26 percent in the early part of the 1990s, to only 15 percent this year.

One concession the Union received, which may backfire in the not too distant future, was that some of the original 16 plants scheduled to be closed, may now be left open and receive new investment. 10 of them will close for sure, while details on which ones may receive investment haven't been released yet.

Concerning some of the factories remaining open, Erich Merkle, vice president of auto industry forecasting for the consulting firm IRN Inc., said, "They're just delaying the inevitable, and the inevitable is they need to reduce capacity. The market's so competitive. As long as we have this excess capacity situation, there isn't going to be any pricing power."

I think he's right in this case. While union leaders think they had to come back with something for its workers, they can't afford to hurt this company any further, while placating the rank and file. This isn't like past negotiations, the problems are devastatingly real, and getting too much could end up hurting more workers over the long term, rather than facing reality and taking the pain of what needs to be done all at once.

The problem ratifying this contract will entail, is the recent announcement by Chrysler they'll cut between 8,500 to 10,000 jobs, while eliminating shifts at five of their plants in North America. It will cause workers to pause in whether they'll agree to this or not.

This is why it's better to just let everything be known upfront. There's simply no way the current economic conditions and competition will allow the auto companies to offer job security. It just can't be done; even with the best of intentions and integrity. The economic factors forbid it.

So even if all the agreements are made, there will have to be cutbacks and job loss. There's no way Ford could go forward, or the other auto companies as well.

Even General Motors (GM) had to eliminate 1,700 jobs after the contract was agreed to. If they had to, along with Chrysler also, Ford will definitely have to make some huge cuts, no matter what type of contract is agreed to. Things are simply that bad out there, and they can't be in denial or offer false hope to the workers.

No matter what type of contract is signed, the realities of the market place will still be the final decider in what steps have to be taken. The survival of the auto industry in the U.S. will depend on it.