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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.

Ford's simple suit makes you feel like a drunk driver

We've all heard about the dangers of drunk driving for practically our entire lives. Whether it's from PSAs on TV or lectures in school, no one can claim ignorance of drunk driving being extremely dangerous. However, that doesn't prevent some people from still doing it. Ford is trying to take the safety message directly to young drivers with a special suit that allows them to simulate driving under the influence. It is all part of Ford's Driving Skills for Life program that gives free driving education to young people. The program is meant to "train kids in skills they don't learn in driver's ed," said Kelli Felker, Ford Safety Communications Manager, to Autoblog. The drivers don a few items to impair their senses and make them off-balance to simulate having a few too many drinks and then go out on a closed course with an instructor to see the effects. Felker said that the suit is a new part of the program, and Ford just received the outfit in the US. It will be incorporated into the training here in the late spring or early summer. Scroll down to see the effect it has on drivers in Europe. This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.

Lexus gets top brand marks from Consumer Reports; Ford, Jeep hit hard

Consumer Reports has released its 2014 Car Brand Report Cards, with Lexus again reigning at the top and doing so with the same industry-topping score of 79 that it registered in last year's Report Cards. This year, the institute credited its lineup for being "usually quiet, comfortable, and fuel-efficient," noting it's the only brand on the list "to achieve an excellent average overall reliability score." The Car Brand Report Cars list is meant to rank the best all-around vehicles based on CR testing and reliability results tallied by subscribers it surveyed. Each brand included must have sufficient test and reliability data for at least three models, a standard which left out 11 marques including Fiat, Jaguar, Land Rover and Porsche.
This 2014 Brand Report Cars edition is the first of a new format in which sub-brands have been broken out from their parent brands, with Acura using this year to move up the leaderboard into second place with a score of 75 for its "reliable, well-finished and somewhat sporty models." The top three was rounded out by Audi, climbing from eighth to third by scoring a 74 for "well-crafted interiors, nice handling and good gas mileage." Audi scored highest in the road-test portion, its improved reliability aiding its rise. The top nine was completed by Subaru, Toyota, Mazda, Honda, Infiniti and Mercedes-Benz.
Ford and Jeep weighed in at the other end of the rankings, Jeep taking the lowest overall score in the road tests and hampered by "a mix of spotty reliability." Ford was sunk by reliability issues with its MyFord Touch infotainment system which consumers found troublesome enough to negate its cars earning "solid test scores" for being "very nice to drive." Perhaps the rumored switch from Microsoft to Blackberry's QNX for the next generation SYNC will help them out. Cadillac's score also took a hit for infotainment reasons after it was the leading US brand last year, the CUE system in the XTS dragging Cadillac to the bottom of all General Motors brands.