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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.

Jaguar Land Rover opens winter testing facility in Minnesota

As it begins the rollout of the all-wheel-drive Jaguar XJ and XF models, Jaguar Land Rover has just announced that it has opened a new facility in northern Minnesota for winter testing. Located in International Falls, MN (on the US and Canadian border), the British automaker says it is one of the coldest locations in the Continental US. Jaguar's new Instinctive All Wheel Drive system was developed primarily to help sell more cars in the northern US, so it only makes sense to open a testing area in the US as well.
With temperatures that can drop to minus 55 degrees Fahrenheit, International Falls was chosen to mimic some of the worst weather a Jaguar or Land Rover will ever see. The grounds house testing chambers, various road surfaces and even a frozen lake. This new facility complements the hot-weather testing grounds in Phoenix, AZ.
The official press release is posted below.

James Bond Spectre villain to drive never-was Jaguar C-X75 supercar

James Bond is used to being outgunned. Often working alone, 007 has developed a knack for taking out major criminal syndicates and terrorists despite this routine disadvantage. But in his latest film, Spectre, we suspect Mr. Bond will have met his match in at least one regard – the car being driven by his nemesis, Franz Oberhauser, played by Christoph Waltz. For the 24th Bond flick, Spectre, the chief baddie will reportedly be driving the oft-fancied Jaguar C-X75 Concept car, which will star opposite of the hero's new Aston Martin DB10. As you'll recall, Jaguar flirted with actually producing the C-X75 before calling it off just over two years ago. According to Autocar, which spoke to people involved in the film's production, Herr Oberhauser's C-X75 will be powered by Jaguar Land Rover's popular 5.0-liter, supercharged V8, rather than its original complex hybrid powertrain (which relied on four electric motors recharged by a pair of diesel-fueled micro gas turbines). Jaguar would not confirm its role in the upcoming film, although Autocar has pieced together a few powerful signs that the company will be donating the services of its concept to the new flick. First, supplying the villain's car for the latest Bond film fits in nicely with the company's "Good to be Bad" campaign, despite the fact that the villain, in this instance, is Austrian, rather than British. Moreover, Autocar points to Aston's use of the tagline "It's good to be Bond" since the reveal of the new DB10, as an indication that the Jag will be opposing its former corporate cousin in Spectre.