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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.

2021 Chrysler Pacifica gets fresh face and brings back all-wheel drive

The rumors were true, the 2021 Chrysler Pacifica has brought back all-wheel drive as an option after it disappeared from Chrysler minivans in 2004. Not only that, buyers don't have to choose between having more traction or more cargo flexibility, as both features can coexist on one van. And to herald the changes, Chrysler has also updated the styling, features and trim line. Of course the all-wheel drive is the biggest change, and according to Chrysler representatives we talked to, it was something that was planned for since the launch of this generation of Pacifica. When the platform was developed, they wanted to make sure that if demand called for bringing it back (and it did, more on that later), that it wouldn't be difficult to implement, and that the fold-into-the-floor Stow 'N' Go second-row seats would still fit. Some changes were necessary, such as rerouting the exhaust and tweaking the design of the gas tank, which retains the same volume as a front-drive van. The all-wheel-drive system itself is capable of routing power completely to the rear if necessary, and the driveshaft and power takeoff unit can disengage for fuel savings. It's controlled entirely automatically, taking into account the severity of driver steering and throttle inputs, outside temperature, use of windshield wipers and detection of wheel slip. Besides the extra drive wheels, the 2021 Pacifica gets a reworked nose and hatch. The fascia is much more aggressive with its taller, frowning main grille. The headlights have new LED running light designs. Around at the back, the taillights are new full-width units. The interior has more subtle but still noteworthy changes. All Pacificas now have a 10.1-inch infotainment display as standard, and they're the first FCA products to use the Uconnect 5 operating system. The system brings several upgrades including full Amazon Alexa integration, wireless Apple CarPlay and Android Auto, multiple driver profiles, and more, which you can read about here. Pacificas are also available with a new center console that offers more covered storage space, but also gives the front seats a more cosseted feel like in a car or a crossover. They all differ on overall length toward the back and what kind of arm support they provide. Chrysler also offers something called the FamCam, which gives the driver and front passenger the ability to keep an eye on the kids with cameras controlled from the touchscreen.

Michigan Gov. Gretchen Whitmer says manufacturing can reopen May 11

Michigan Governor Gretchen Whitmer on Thursday said the state's factories can reopen next Monday, May 11, removing one of the last major obstacles to North American automakers bringing thousands of laid-off employees back to work amid the coronavirus pandemic. While reopening the manufacturing sector, Whitmer also extended her state's stay-at-home order by about two weeks to May 28, citing a desire to avoid a second wave of COVID-19, the respiratory illness caused by the novel coronavirus. “WeÂ’re not out of the woods yet, but this is an important step forward," Whitmer said in a statement. "As we continue to phase in sectors of our economy, I will keep working around the clock to ensure our businesses adopt best practices to protect workers." This week, General Motors and Fiat Chrysler Automobiles said they were targeting resuming vehicle production in North America on May 18, but suppliers would need time to prepare ahead for that date. Ford has not said what date it is targeting. The governor previously extended the state's coronavirus stay-at-home order through May 15, but had lifted restrictions for some businesses. Neighboring Ohio had allowed manufacturing to resume this past Monday, putting pressure on Whitmer to follow suit. Michigan's shutdown had stymied efforts by the Detroit Three and rival automakers to restart vehicle assembly anywhere in the United States, because so many critical parts suppliers are based in the state. Automakers and their suppliers already have begun gearing up for a possible resumption of work at their U.S. plants, but needed the official go-ahead from Whitmer. Industry officials had been pressing Whitmer to allow suppliers to reopen starting May 11 so the automakers could resume operations on their target date. They also wanted the green light so they can press Mexico to open its auto sector as suppliers there are also critical for the industry restart. The automakers' plans were tacitly approved on Tuesday by the United Auto Workers union, which represents the Detroit automakers' hourly U.S. plant workers. The union had previously said early May was "too soon and too risky" to restart manufacturing. Under Whitmer's new order, factories must adopt measures to protect workers, including daily entry screening, no-touch temperature screening as soon as possible and use of protective gear like face masks. Automakers have already rolled out such policies.