There is yet another reason to celebrate in Detroit. For the second time in a week, one of the city's beleaguered auto companies has announced a profitable quarter. Today, General Motors said it earned $1.4 billion dollars in the second quarter, excluding special items. Last week Ford reported a profit.

In a way that good news couldn't come at a worse time for GM, Ford, and Chysler. A little over two weeks ago the companies kicked off contract negotiations with the United Auto Workers Union. When the talks began, analysts said the companies' weak financial positions could give them the upper hand at the bargaining table. Now, they think it may be tough for the car companies to plead poverty when they are making money.

But despite a profitable quarter, the U.S. auto industry is far from robust. Both GM and Ford continue to lose money in North America, even though they have dramatically reduced costs through plant closings and job cuts. All of the companies say they need to make deep reductions in health care costs if they hope to compete with Asian transplants.

During my interview with GM Chief Financial Officer Fritz Henderson, I asked if the profitable quarter would be a factor in the contract negotiations with the UAW. Henderson didn't want to talk about the negotiations, but said "we need to find solutions that will allow GM to grow to be competitive." Healthcare is probably one of the those solutions.

So far there has been little news on the contract talks. They appear to be proceeding peacefully. The question is... will that change in the coming weeks as the union digests the second quarter numbers?