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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.

NHTSA advances investigation of Ford Crown Victoria headlights

The National Highway Traffic Safety Administration is opening a preliminary evaluation into reports of suddenly failing headlights on 517,945 examples of the 2003-2005 Ford Crown Victoria and Mercury Grand Marquis. The government started looking into this problem in April when the North Carolina Consumers Council filed a defect petition with the agency. Now, the inquiry has moved to the next step. According to NHTSA's documentation (as a PDF), it examined its own database and worked with Ford to come up with a total of 3,609 complaints of the front lighting control module suddenly failing. When this happens, drivers lose the low-beam headlights, but the high-beams can be used by holding the stalk. Sometimes turning the switch off and on fixes the issue. Additionally, there are 15 allegations of crashes, and one reported shoulder injury. NHTSA's preliminary evaluations "evaluate the scope, frequency, and consequence of the alleged defect" and don't necessarily lead to a recall. NHTSA looked into this problem once before in 2008 and 2009 and decided that a recall wasn't necessary. Ford also extended the warranty on the front lighting control module for these vehicles. INVESTIGATION Subject : Loss of headlights Date Investigation Opened: AUG 10, 2015 Date Investigation Closed: Open NHTSA Action Number: PE15028 Component(s): EXTERIOR LIGHTING All Products Associated with this Investigation Vehicle Make Model Model Year(s) FORD CROWN VICTORIA 2003-2005 MERCURY GRAND MARQUIS 2003-2005 Details Manufacturer: Ford Motor Company SUMMARY: After receiving a defect petition (DP15002) concerning the loss of headlights and other exterior lighting in model year (MY) 2003-2005 Ford Crown Victoria and Mercury Grand Marquis vehicles, the Office of Defects Investigation (ODI) analyzed Vehicle Owner Questionnaire (VOQ) complaints received from consumers and identified a total of 605 reports (for all submission dates) alleging headlight failure. The complaints indicate failures of both low beam headlights typically while driving, a defect condition that was evaluated under a prior ODI investigation (PE08066). Most consumer VOQs indicate that the headlights failed suddenly and without warning leaving the driver with no forward lighting, however some report the headlights flickered or dimmed prior to turning off. In some cases drivers were able to turn the headlights back on after a period of time while others reported the headlights would not come back on at all.

V6 engines will outpace V8s for the 2015 Ford F-150

How times have changed. Even five years ago, who would have thought the mighty V8 would be just another engine choice for buyers of the 2015 Ford F-150?
Ford is projecting about 28 percent of the next-generation trucks will have the 5.0-liter V8. That's nothing to sneeze at, but consider this: Ford figures its two EcoBoost truck engines - the new 2.7-liter V6 and the existing 3.5-liter V6 - will also each account for about 28 percent of the F-150's sales (56 percent total). That leaves only 15 percent of the pie for the 3.5-liter (non-EcoBoost) V6. The new F-150 goes on sale late this year.
Ford figures its two EcoBoost truck engines will each account for about 28 percent of the F-150's sales.