2001 Ford Windstar Se Mini Passenger Van 4-door 3.8l on 2040-cars

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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.

70% of pickups could use aluminum by 2025

In the next decade, the auto industry will see an explosion in its use of aluminum to cut weight and increase fuel economy, according to a study from market analysts Ducker Worldwide cited by The Detroit News. We are already seeing the lightweight metal show up extensively in luxury models from Europe, but with the impending launch of aluminum-intensive 2015 Ford F-150 (pictured above), North America is using it even more, as well. The report predicts 70 percent of US pickups to have aluminum bodies by 2025.
It won't just be pickups that see the benefit, though. The average amount of aluminum in US vehicles is forecasted by the study to grow from an average of 350 pounds in 2013 to about 550 pounds by 2025. The most common parts to use it will be hoods, doors and - to some extent - roofs, as well.
The massive increase in pickups' aluminum content hardly seems surprising. The F-150 is predicted to use so much that it might cause a short-term shortage, according to one earlier report. At the same time General Motors is heavily rumored to be negotiating with suppliers for the next generation Chevrolet Silverado and GMC Sierra. Ram is the last holdout of the Big Three, but the study predicts that not to last.

How privacy fears are driving automakers in the age of the connected car [w/poll]

A recent GAO report concluded car companies don't adequately disclose how and why they share location data. As cars collect and store more and more data about the whereabouts of their drivers, automakers are responding to critics who say they should be more transparent about how those details are used. Ford is hiring a global privacy policy attorney to craft the company's customer privacy policies in the era of connected and autonomous cars. "In this emerging space, there is an important need to address customer privacy policies," reads a job description posted on the "people and careers" portion of the company's website. "As part of our compliance and ethics organization at Ford, this person will have an immediate and direct impact in shaping existing and future policy and corporate thinking in this area." Ford is creating the new position, based at its Dearborn headquarters, at a time technology advances are outpacing privacy protections. Earlier this year, a report from the federal government concluded car companies don't adequately disclose to motorists how and why they share location data. That report, from the Government Accountability Office, found many car companies did not describe how they shared location data, did not allow consumers to request their data be deleted and that there was a "wide variation" in how car companies retained vehicle-specific or identifiable location data. It noted there is increased risk of location data being used in ways "consumers did not intend." Ford was one of 10 companies the GAO surveyed while compiling its report. Customers are opting to share that data largely by using features like maps and turn-by-turn direction that are run by a vehicle's telematics unit. Depending on the company, it can be unclear how that data is collected, retained or shared. At the time the GAO report was issued, AAA, the nation's largest motoring club, urged carmakers to be more transparent in how they handle data and to offer stronger security protections. Shaping Autonomous Car Regulations At Ford, the new hire could change how the company handles that data. According to the job description, the successful applicant will, "demonstrate visionary thinking around privacy strategy – imagine how consumer and employee expectations around privacy may evolve and how business should adapt, develop approaches that maximize the benefit of data sharing for consumers and business, etc." (Emphasis from Ford).