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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.

Jaguar-Land Rover will use recycled waste to make parts for future models

Jaguar-Land Rover's future models will be partially made of junk. The company announced it's working on integrating a recycled material named Econyl into its manufacturing process in the coming years. Created in 2011 by Italy-based Aquafil, Econyl is a fiber made with a blend of recycled industrial plastics, fabric offcuts sourced from clothing manufacturers, and discarded fishing nets aimlessly floating around the ocean. It's more eco-friendly to produce than oil-based fibers, according to Jaguar, and it helps clean up the planet. Jaguar and Land Rover will use Econyl to make floor mats in the not-too-distant future. Neither company listed the models they'll put the material in, but it's reasonable to assume recycled floor mats will be available in the next-generation XJ, which will be electric, and the next-generation Range Rover. Both will be released in 2021. Eco-friendly materials are slowly but surely spreading across the luxury car segment. Jaguar already offers the I-Pace with a Kvadrat upholstery that combines regular wool and up to 53 recycled plastic bottles per car. Audi's fourth-generation A3 is optionally available with an upholstery made largely using recycled plastic bottles, and Volvo estimates at least 25% of the plastics in its cars will be recycled starting in 2025. Environmentalist organizations are putting an increasing amount of pressure on carmakers to deliver so-called vegan interiors. A group called EarthSight recently accused several companies (including Jaguar-Land Rover and BMW) of using leather from cattle raised on illegally logged lands in Paraguay. Representatives for the British company stressed they found no evidence to verify EarthSight's claims. Related Video:

UK electric motor maker YASA expands production 50-fold for EVs

LONDON — British electric motor manufacturer YASA said on Thursday it was increasing its production capacity from 2,000 to 100,000 units with a new factory to tap into growing demand from carmakers for greener technologies. Automakers are racing to build greener vehicles and improve charge times in a bid to meet rising customer demand and air quality targets but Britain lacks sufficient manufacturing capacity, an area the government is building up. Last year, the government picked a site in central England to house a new automotive battery development facility, which will develop the processes required to manufacture the latest battery advancements. On Thursday, YASA, based near the English city of Oxford, said it had raised another 15 million pounds ($21 million) as part of its expansion. "Our customers are looking to adopt innovative new technologies such as YASA's axial-flux electric motors and controllers in order to meet the needs of the rapidly expanding hybrid and pure electric automotive market," said Chief Executive Chris Harris. The firm exports 80 percent of production and has worked with companies including Britain's two biggest carmakers Jaguar Land Rover and Nissan as well as Aston Martin. JLR will decide this year whether to build electric cars in its home market, previously citing factors such as pilot testing and support from science and government as pre-requisites. Reporting by Costas PitasRelated Video: