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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.

VW modular platform strategy goes all-in on EVs

The Volkswagen Group has already revealed or put on sale a broad slate of new electric vehicles: the E-up, the E-Golf (shown above), the Porsche 918 Spyder, the Panamera S E-Hybrid and the XL1. In 2014, there will be at least six more models, including the A3 Sportback E-Tron. And after that? Well, to hear Rudolf Krebs, Group Commissioner For Electric Vehicle Drive Systems, tell it, VW's future is full of plug-in goodness. "With our platform strategy, it is quite easy to bring a lot of electrified vehicles to the market for the different brands in a very short time," he said. "We try, with a minimum of those components, to produce a maximum number of variants of cars" That strategy starts with three platforms: MQB for small cars, MLB for midsize models and MSB for sporty and premium products (there's also the NSF for cars like the E-up). Speaking to AutoblogGreen, Krebs said VW has designed modules, things like engines and electric components (think: AC compressor, on-board chargers and battery management systems), to be used across all three platforms and across all brands all. "We try, with a minimum of those components, to produce a maximum number of variants of cars," he said. "This is only possible if, at an early stage of the design of new vehicles, we implement the idea that these cars are not only designed for gasoline and diesel powertrains but that we can also include CNG concepts, flex-fuel concepts, pure electric vehicles or plug-in hybrid vehicles. With minor changes in the body in white, we can produce those vehicles, bumper-to-bumper, in one factory." "VW wants to be the leader in the electrification of vehicles" In this way, customers can choose the powertrain that they want, or whatever powertrain their local regulations demand. Politicians have already put a lot of pressure on the automotive industry, with ever-stricter CO2 regulations coming into effect in all of the major markets. In the US, the fuel economy regulation numbers require the equivalent of 101 grams of CO2 emissions per kilometer by 2025. Europe, it's 95 grams by 2020. And China, which is asking for 118 grams by 2020, will be a tough scenario, Krebs said. Today, by optimizing conventional technologies and supporting things like CNG and biofuels, more than 300 VW Group models emit less than 120 g/km. A hundred of those are even under 100 g/km. But this is not sufficient, and VW admits that conventional powertrains will not be not enough.

eBay Find of the Day: Unrestored Herbie Love Bug movie car

Well before Cars ever hit the screens, The Love Bug series of Disney films – starring Herbie the VW Beetle with a mind of its own – was an early introduction to cars and racing for many budding auto fans. Not the modern remake starring Lindsay Lohan mind you, but the originals from the '60s and '70s. Now, a seller in Texas claims to be offering a chance to own one of the Bugs from the films on eBay Motors. According to the auction, this Beetle didn't appear in the original film but was built for the sequel Herbie Rides Again in 1972 and also appeared in the third installment Herbie Goes to Monte Carlo. This VW was prepared as the blind-drive car for the movies that attached a low-mounted chair in the back and extended controls to let Herbie look like he was driving himself. Although, some of the photos here show the Bug with regular seats fitted, too. This Herbie was reportedly found in a Florida warehouse a few years ago. It was then made operable, while trying to keep it as original as possible. The exterior underwent a slight restoration with input from former Disney special effects staff, according to the seller. The changes added new graphics and rebuilt the blind drive setup. Judging by these pictures, the rest of the interior was left mostly untouched, though. Of course, anyone interested in buying a movie car is going to want proof of its authenticity. The seller claims to have the original California title showing the buyer as Disney in 1972. The Bug also reportedly has a unique rear decklid that mixes early and later parts to help identify it in the film. As of this writing, bidding for Herbie sits at $55,100 with 82 bids and a reserve not yet met. The sale closes on Saturday, December 13.