1922 Ford T Bucket Street Rod on 2040-cars

Auto blog

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.

Detroit automakers mulling helping DIA avoid bankruptcy looting

It's not really a secret that the city of Detroit is in lots and lots of trouble. Even with an emergency manager working to guide it through bankruptcy, a number of the city's institutions remain in very serious danger. One of the most notable is the Detroit Institute of Arts, a 658,000-square-foot behemoth of art that counts works from Van Gogh, Picasso, Gauguin and Rembrandt (not to mention a version of Rodin's iconic "The Thinker," shown above) as part of its permanent collection.
Throughout the bankruptcy, the DIA has been under threat, with art enthusiasts, historians and fans of the museum concerned that its expansive collection - valued between $454 and $867 million by Christie's - could be sold by the city to help square its $18.5-billion debt.
Now, though, Detroit's hometown automakers could be set to step up and help save the renowned museum. According to a report from The Detroit News, the charitable arms of General Motors, Ford and Chrysler could be set to donate $25 million as part of a DIA-initiated campaign, called the "grand bargain." As part of the deal, the DIA would seek $100 million in corporate donations as part of a larger attempt at putting together an $816-million package that would be paid to city pension funds over 20 years. Such a move would protect the city's art collection from being sold off.

Ford Edge Concept previews new look, can park itself remotely

It turns out the image we saw back in February did, in fact, reveal the next-generation Ford Edge - at least in concept form. We still have to wait to see what the design will look like in production guise, but until then, Ford is giving us a good idea thanks to the Edge Concept being introduced at the LA Auto Show.
The new styling is an evolution of the current crossover's face with narrow headlights and a prominently slatted grille, while the rest of the design adds a more dynamic appearance with interesting body creases and horizontal taillights. We haven't gotten a look inside the Edge Concept just yet, but Ford is promising a suite of advanced driver-assist technologies including a new self-park system that allows activation from inside or outside the vehicle along with obstacle avoidance and an adaptive electric power steering system.
Ford will continue to offer an EcoBoost engine option in the upcoming Edge, and it will get active grille shutters to help maximize fuel efficiency. No word yet on when we'll be seeing the next-gen Edge in production form, but as we reported recently, it will become a global model in markets including Europe, China and South America. Ford's press release is posted below, but we'll have more information and images up later today.