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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 Escort returns... as a concept

Ford is kickin' it old school at the Shanghai Motor Show for 2013 with a new Escort Concept - "a name that stirs up thoughts of basic, affordable transportation rather than great driving dynamics or bold design" as we said in our initial preview of the small C-segment sedan. Or, as Ford puts it, "Customers in China described seeking a vehicle that is stylish - but not one that is arrogant or pretentious." Potato, potahto...
It's an interesting amalgam of design notes with Ford's recent and stylish hexagonal grille up front, flanked by some pretty busy LED light clusters and chrome-trimmed air intakes at the lower extremities of the fascia, but the Escort Concept is not altogether unattractive. Besides its external appearance, we really don't have much information to report - Ford has not yet hinted at what may be powering this little machine, but we'd expect something with four cylinders and less that 2.0 liters of displacement sending a modest number of horses to the front tires.
It probably goes without saying, but we don't expect to see this Escort make its way to the United States, since we already have the Focus and the Fiesta battling it out in the econobox segment. That said, it's very likely to spawn a production model that will roll out here in China and in other developing market where multiple C-segment entries are becoming increasingly common. Check out our high-res image gallery of live images above, and let us know what you think of the car's styling, then scroll down below for the official press release.

Ford recalls 591,177 vehicles in four separate campaigns

Ford is issuing recalls for a total of 591,177 vehicles worldwide, in four separate campaigns. The announcement comes just days after the discovery of door-latch problems in 390,000 of the automaker's cars. The largest of these new recalls covers 518,313 examples of the Ford Fusion and Lincoln MKZ from the 2013-2015 model years, plus the 2015 Edge. Of these, 487,301 of are in the US and 31,012 are in Canada. For vehicles in cold-weather areas, the bolts that hold the steering gear motor can corrode and fracture. If this happens, it could cause the power steering to fail, but manual control would be retained. There are no reported accidents or injuries from this problem. To fix things, dealers will replace the bolts and seal them. The next campaign covers 50,157 examples of the 2014 Focus, Edge, Escape, and Transit Connect, plus the Fiesta from 2014 and 2015. Of these, 45,505 are in the US, 4,618 in Canada, and 34 in Mexico. All of them exhibit a problem with the fuel pump where the nickel plating can cause the part to seize and the engine to stall, if this occurs. (All of which sounds like recent problems with Nissan and BMW models.) According to Ford, there is one allegation of an accident from this problem. Dealers will replace the fuel delivery module to fix the problem. Ford is also recalling 22,616 units of the 2015 Lincoln MKZ because when the headlights are on, the parking lamps are brighter than they are allowed to be. The light could affect the vision of other drivers. This campaign includes 21,435 of them in the US, 1,066 in Canada and 115 in Mexico. There are no accidents or injuries from the issue, but Ford is updating the software to dim the lights on these sedans. Finally, Ford has a safety campaign for 91 examples of the 2015 F-150 because an underbody heat shield might not be properly installed or not present at all, which can be a fire risk. There are no reports of any actual accidents or fires, though. The affected pickups will have the parts replaced or added, as necessary after a dealer inspection. To see the specific build dates for the models affected by each of these campaigns, you can read about them in the press release below. Related Video: FORD ISSUES FOUR SAFETY RECALLS IN NORTH AMERICA Ford Motor Company is issuing four safety recalls in North America. One accident and no injuries are attributed to these conditions.