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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.

Autoblog Podcast #339

Farewell, Zach Bowman; Pikes Peak 2013; Datsun; 2014 Ram lineup
Episode #339 of the Autoblog Podcast is here, and it's the last rodeo for Zach Bowman before he departs for other pastures. The crew this week consists of Dan Roth, Zach Bowman and Jeff Ross, who talk about the astounding records set at this year's Pike's Peak hill climb, the return of the Datsun brand name and the recently-announced 2014 Ram truck lineup. Of course, we start with the garage and end with your questions and comments. For those of you who hung with us live on our UStream channel, thanks for taking the time. You can follow along after the jump with our Q&A. Thanks for listening!
Autoblog Podcast #339:

Waymo opens its self-driving taxis to 'Trusted Testers' in San Francisco

Alphabet's fully autonomous driving unit Waymo is ready to offer rides to select passengers in San Francisco, the company announced on Tuesday. Starting later today, residents can sign up to become "Trusted Testers." With an invite to the program, you can use the Waymo One app to take rides in the fleet of Jaguar I-Pace vehicles Waymo will have stationed in the city.  Waymo describes the Trusted Tester program as a "research-focused" effort designed to help it collect feedback on its ride experience, with an emphasis on gathering information related to accessibility.    "We kicked off this program last week with a select few and are now expanding the program to all interested San Franciscans," the company said. "We’ll begin with an initial group and welcome more riders in the weeks to come." Much like it did in Arizona, Waymo won't let the cars drive without supervision right off the back. The company will have employees in the cars to ensure its fifth-generation Waymo Driver technology doesn't get lost on San Francisco's tricky one-way streets and hills. The company also told Bloomberg passengers will ride for free.   The expansion comes after Waymo recently announced CEO John Krafcik was leaving the company to pursue other projects. Some saw Krafcik as being too slow to push the company toward commercialization.  This article by I. Bonifacic originally appeared on Engadget. Related Video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.