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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.

Which is more fuel efficient, driving with a pickup's tailgate up or down?

Thanks to the smoke wand in the wind tunnel, you can actually see the difference in our video.
Should you drive with your pickup truck's tailgate up or down? It's an age-old controversy that's divided drivers for decades. Traditionalists will swear you should leave the tailgate down. Makes sense, right? It would seem to let the air flow more cleanly over the body and through the bed. But there's also a school of thought that argues trucks are designed to look and operate in a specific manner, and modern design techniques can help channel the airflow properly. So don't mess with all of that: Leave the tailgate up.

Hands on with Ford Sync 3

It's kind of funny (not funny) how the infotainment systems in our vehicles seem to lag behind the consumer products in our pockets. Long after we had easy-to-use touchscreens on our phones, the glass panels in the center stack of our cars remained obstinately mired in the muck of technology past. We are happy to report it's getting better. We had a chance to go hands-on with the new Sync 3 system from Ford at a technology event. Not once were we struck by the urge to reach out and offer a bit of knuckled encouragement. The processors kept swiping smooth, and the voice recognition could understand even our mumbly mouthings. The voice prompts were certainly fewer and less frustrating than in times past. Ask for the nearest Indian restaurant, and it quickly brought up a list to choose from, ready to offer directions. Want to listen to NPR, just say the word. Sync 3 also improved its ability to get along with others, by which we mean it nicely integrates a range of apps from your phone and can incorporate their individual areas of expertise. With Pandora installed, we could ask for a particular playlist and it would begin streaming. If we wanted a certain artist, it would pull it from the phone's memory upon request. To get a sense of what how the new system functions, check out the video above for a quick look at the improved layout and a demonstration of its smoothness and smarts. To get a look at how it integrates with music streaming services, scroll down for a Pandora-centered Short Cut below.