2008 Ford Edge Limited on 2040-cars

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Rising aluminum costs cut into Ford's profit

When Ford reports fourth-quarter results on Wednesday afternoon, it is expected to fret that rising metals costs have cut into profits, even as rivals say they have the problem under control. Aluminum prices have risen 20 percent in the last year and nearly 11 percent since Dec. 11. Steel prices have risen just over 9 percent in the last year. Ford uses more aluminum in its vehicles than its rivals. Aluminum is lighter but far more expensive than steel, closing at $2,229 per tonne on Tuesday. U.S. steel futures closed at $677 per ton (0.91 metric tonnes). Republican U.S. President Donald Trump's administration is weighing whether to impose tariffs on imported steel and aluminum, which could push prices even higher. Ford gave a disappointing earnings estimate for 2017 and 2018 last week, saying the higher costs for steel, aluminum and other metals, as well as currency volatility, could cost the company $1.6 billion in 2018. Ford shares took a dive after the announcement. Ford Chief Financial Officer Bob Shanks told analysts at a conference in Detroit last week that while the company benefited from low commodity prices in 2016, rising steel prices were now the main cause of higher costs, followed by aluminum. Shanks said the automaker at times relies on foreign currencies as a "natural hedge" for some commodities but those are now going in the opposite direction, so they are not working. A Ford spokesman added that the automaker also uses a mix of contracts, hedges and indexed buying. Industry analysts point to the spike in aluminum versus steel prices as a plausible reason for Ford's problems, especially since it uses far more of the expensive metal than other major automakers. "When you look at Ford in the context of the other automakers, aluminum drives a lot of their volume and I think that is the cause" of their rising costs, said Jeff Schuster, senior vice president of forecasting at auto consultancy LMC Automotive. Other major automakers say rising commodity costs are not much of a problem. At last week's Detroit auto show, Fiat Chrysler Automobiles NV's Chief Executive Officer Sergio Marchionne reiterated its earnings guidance for 2018 and held forth on a number of topics, but did not mention metals prices. General Motors Co gave a well-received profit outlook last week and did not mention the subject. "We view changes in raw material costs as something that is manageable," a GM spokesman said in an email.

Will the new Ford GT race at Le Mans?

Ford stole the spotlight here on the floor of the Detroit Auto Show this year with the reveal of the new GT. Its carbon-fiber chassis, 600-plus-horsepower EcoBoost engine and radical aerodynamic shape made sure of that, but flanking it with the debuts of the Mustang GT350R and F-150 Raptor didn't hurt any, either. Any racing fan looking at the new Blue Oval supercar, however, had to wonder whether Dearborn is planning on putting it on the race track. The House that Hank Built is, after all, a known entity in motor racing. It may be canceling its V8 Supercars program Down Under, withdrawn its support from the World Rally Championship, and it's been years since it's competed in Formula One or Indy. But it still competes in the United SportsCar Championship, NASCAR, NHRA and a variety of motor racing disciplines. One of its most famous and celebrated of racing endeavors, however, came in the form of the original GT40 that brought Ford four consecutive victories at the 24 Hours of Le Mans, starting with a dominant one-two-three finish in 1966. It's the 50th anniversary of that landmark win which the new Ford GT celebrates, but while the press materials made clear reference to that historical event, any mention of a return as was previously speculated was carefully omitted. That, according to Autosport, could come down purely to the ACO, the organizers of the event and sanctioning body for its associated series, which has yet to announce the revised format for the GTE class under which a potential Ford GT racer would compete in 2016. Longtime Ford racing partner Multimatic is said to have closely consulted with the ACO on the formation of those rules, however, and assuming they're finally formulated to Dearborn's liking, we could be looking at a GTE-spec Ford GT to return to La Sarthe next year in celebration of that landmark victory half a century prior. Chip Ganassi Racing – which races under Chevy power in NASCAR and Indy but recently switched to Ford for its Daytona Prototype – is said to be in line to field the car on Dearborn's behalf. If given the green light, it would be the first time Ford would field a factory effort at Le Mans since the C100 project under the Group C category in the early 1980s. A racing version of the previous Ford GT was prepared by Switzerland-based Matech a few years ago, but without factory support or notable success beyond the FIA GT3 European Championship.

2016 Ford Explorer embarks at the LA Auto Show

Twenty-five years since its debut in 1990, Ford will celebrate a quarter century of Explorer models next year with the debut of a refreshed 2016 model at the 2014 Los Angeles Auto Show on November 19. The Blue Oval is keeping mum on hard details about the updated SUV for now, but the brand promises, "a new look, added capability and additional driver-assist technology," in its announcement.
Company marketing boss Jim Farley elaborated a little more on what to expect. "The new Explorer is still the SUV America fell in love with - a vehicle built for the perfect family adventure," he said in the release that you're welcome to read down below.
An updated Explorer is a pretty big deal for Ford's bottom line. Worldwide, SUVs and crossovers account for about 23 percent of Ford's sales, and the segment is projected to grow to around 29 percent by 2020. Ford further says that SUVs and CUVs are the world's quickest growing segment with demand up 88 percent since 2008.