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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.

2017 will be the year the connected car becomes a reality

2016 was full of talk of autonomy, but little action beyond crazy, futuristic concept cars and announcement after announcement from automakers. If this year's CES is any indication, 2017 is going to focused on connectivity. More than that, CES showed that traditional barriers between automakers are breaking down in favor of universal and open source technology standards that will benefit both consumers and developers. CES, traditionally a showcase for the latest and greatest technology and gadgets like flat-screen refrigerators or televisions that broadcast in the fifth dimension, has become so intwined with the auto industry that we at Autoblog cover it like any other auto show. At every CES event I attended and nearly every booth I went to, there was some talk, display, or demonstration of how cars will connect to your phone and your home, and eventually each other. It seems we're heading toward the tech singularity where all devices work under one cohesive ecosystem – the Internet of Things, if you like. The difference between autonomy and connectivity is how real the latter feels because so much of the connected tech on display at CES is either here already or will be here by the end of the year. There were dozens of demos, both big and small, that allowed us to test and explore what's on the horizon. Bridging the gap between home and car, Ford is integrating the Amazon Alexa personal assistant straight into its vehicles. That means you'll be able to talk to Alexa in your car just like you would through an Echo or Dot at home. It also means you can shop on Amazon by voice while you're driving (since that wasn't convenient enough already). Samsung is developing smartwatch applications for Ford, BMW, and others. Toyota is adopting Ford's SmartDeviceLink smartphone connectivity system for its vehicles. That means developers can have one app that works across multiple infotainment systems. The Linux Foundation is developing an open-source operating system that will be free to use, making it easier for developers to connect smartphones and apps across multiple manufacturers' systems. Automotive Grade Linux, or AGL, is available for download right now. Major automakers like Toyota and Daimler (who usually are set on competing with one another) are partnering to further the development of the project. Bosch, Hyundai, and Chrysler showed connected car concepts at CES that preview the future of automobiles.

What an Atlas-based Ford F-150 might look like

Just ahead of January's Detroit Auto Show, surprising rumors pegged Ford as revealing some sort of F-150 concept, perhaps as a hurried effort to deflate some of the buzz building around General Motors' new Chevrolet Silverado and GMC Sierra twins, which were also making their auto show debut. Those rumblings turned out to be true, as Ford rolled into the Motor City with its Atlas concept (inset, right), touting the truck's bold styling as a precursor to the next-generation F-Series.
The show truck featured all kinds of clever details, including active wheel shutters and a front air dam that raised and lowered to improve aerodynamics while preserving off-road ability. It also had a genuinely snarly face. And it's that pugnacious snout that may well be on its way to production. The good folks at TopSpeed have worked up the plausible-looking artist's rendering above by cross-referencing the Atlas concept with what little has been revealed from recent spy shots. The look is toned-down pretty dramatically from the concept truck, but its Atlas roots are clear, with a massive three-bar grille and bracket-shaped headlamps hiding a next-generation EcoBoost engine. In the rendering, the show truck's deeply contoured hood and roofline have been ditched and larger, more traditional side mirrors have been fitted - all likely concessions in the move to production sheetmetal.
While Ford has yet to officially announce when it will unveil the 2015 F-150, all signs point to next year's Detroit Auto Show - one year after the Atlas shrugged off GM's new pickups.