Here’s a quick, one-question pop quiz. Faced with scant details on a breaking news story, should a business reporter run with speculative numbers, or wait to get those numbers right?
After the United Auto Workers tentatively agreed over the weekend to raise health care payments for Ford Motor Company’s hourly employees, Reuters reported Monday that “Ford Motor Co., which is facing a deepening financial crisis, is likely to save over a $1 billion a year in health care costs under an agreement with the United Auto Workers union, analysts said.”
Quoting a Deutsche Bank analyst’s note, Reuters reported, “the agreement will generate annual cost savings of about $1.05 billion, or about 40 cents per share.” The wire service also pointed to a Bear Stearns analyst’s estimate that the deal “should save the automaker about $1.6 billion, or 51 cents a share per year.” Neither Ford nor the UAW provided details for the story, which was reprinted by the Los Angeles Times and MSNBC.
Turns out it would have been worth waiting for those details.
By yesterday, the nice round $1 billion number was forgotten thanks to UAW’s president, who replaced it with a new and presumably correct figure: $850 million. Reported Reuters: “United Auto Workers said Wednesday the deal with Ford Motor Co. will cut the automaker’s annual health care expense by $850 million.” (For its part, Ford said yesterday it would not comment on specifics of the agreement until it is finalized.)
We don’t mean to suggest that the union’s number is necessarily the right one. But it is significant, especially when compared to Reuters’s highest initial estimate of $1.6 billion. Rather than running with bank analysts’ (wildly divergent) figures, the wire service should have waited for some kind of number from the union or the company at the center of the story.
The Associated Press took a different (and decidedly less sexy) approach in a widely reprinted story, shunning unconfirmed figures and reporting only what it knew with certainty: Namely, that Ford and the UAW had reached some sort of “tentative agreement” on health care costs. (To be fair, Reuters took a similar approach in its dispatch Sunday night, prior to jumping the gun on Monday.)
Call us persnickety, but we’re willing to bet that the discrepancy in Reuters’s numbers caused some head-scratching on Wall Street. And so, the answer to our quiz should be obvious: This is one more case where getting it right ought to have taken precedence over getting it first.
Edward B. Colby was a writer at CJR Daily.