Well, as the name is meant to imply, the federal vision is about salvation through covenantal/federal blessing, not works per se. The undermining of the salvific efficacy of Christ's work seems to be a logical consequence of the idea that the reprobate and elect children of believers are objectively part of the covenantal body of Christ through baptism in exactly the same way, not because of their own regeneration and faith, but because of their parents' faith. In order to explain why some covenant children persevere and others fall away, they turn to "covenant faithfulness" as the discriminator - this includes generational faithfulness of parents as well as personal faithfulness of children. But they absolutely treat the baptism of a believer's child as the definitive induction of that child into an objective covenantal relationship with God as real as that of any regenerate believer's.
Lutherans on the other hand believe that every baptized child is really regenerated and given faith at the time of baptism and that their perseverance within the covenant of salvation depends on continuing in that regenerate faith. Because they believe that God creates faith in every baptized child, the covenantal status of children can be hinged upon that personal faith from the start rather than the faith of parents, making their view of the covenant more individualistic. They also claim a much more robust distinction between faith and works than federal visionists.