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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.

Honda wins Commercial of the Decade, but not for the ad you think [w/VIDEO]

Honda's Commercial of the Decade: "Grrr" - Click above to watch video
The mad men at Adweek recently voted for the Commercial of the Decade (Super Bowl commercials not included) and Honda took top honors over memorable ads from the last ten years by companies like Nike, Budweiser and Sony. That's not a big surprise considering Honda often puts a huge amount of effort into its on-air spots. However, the Japanese automaker didn't win for the commercial you might have expected: "Cog." Though Honda's famous commercial that breaks down a European Accord Tourer into a Rube Goldberg-esque machine was also a finalist, it was beaten by another Honda commercial called "Grrr" that's narrated by Garrison Keillor of all people. You've probably never seen it, but you can after the jump.
Volkswagen also made the list of finalists, but the particular ad chosen out of all the comical VW ads we've seen was unexpected as well. Most surprising carmaker with a commercial in the finals: Saturn. Who knew...

Volkswagen Golf GTE Sport Concept debuts at Worthersee

Do you like hot Volkswagens? So do we. And that's why the annual Worthersee festival in Austria is a treat. It's where the Volkswagen Group shows off some performance-minded concept cars, like the GTI Clubsport or the 600-horsepower Audi TT. But VW wants to show that it's possible to increase performance while still maintaining some eco-friendly dignity. And that's where this striking Golf GTE Sport Concept comes in. The concept is powered by a three-motor plug-in hybrid system. There's a 1.6-liter turbocharged inline-four up front, with electric motors mounted at each axle. Total output is said to be 396 horsepower, which is enough to move the all-wheel-drive hatch to 62 miles per hour in 4.3 seconds, on its way to a top speed of 174 mph. It can drive under full electric power, act as a traditional hybrid, or go into full "GTE" mode, where the engine and both motors are on full assault. Its styling is definitely forward-thinking, with angles and creases abound. But it still retains that signature Golf C-pillar design, with a two-tier adaptation first seen on the outrageous GTI W12-650 concept from 2007. The body is largely constructed from carbon fiber and has doors that swing forward and up (think BMW i8). Volkswagen says the Golf GTE Sport Concept "bridges the gap between road cars and racing sport cars." That's evident inside the car, too. There's a rakish dashboard with a three-tier instrument display setup, and a very aggressive cockpit design for the two-seat cabin. Five-point seatbelts on each chair and a racing-inspired steering wheel really drive home the performance mindset of this concept. There's a lot more to learn in the detailed press release below. Check it out, but not before scrolling through the image gallery above. This one's certainly a looker. World premiere of the Golf GTE Sport: Plug-in hybrid sports car catapults the GT idea to the future - Lightweight and high-strength body of the Golf GTE Sport is made of carbon - Concept car with a top speed of 280 km/h is a zero emission vehicle and a race car in one Five key facts about the Golf GTE Sport: 1. Golf GTE Sport is powered by a 295 kW / 400 PS plug-in hybrid system 2. Progressive Golf GTE Sport bridges the gap between road cars and racing sport cars 3. Avant-garde exterior design of the Golf GTE Sport perfects the idea of C-pillars with two-level construction 4. Golf GTE Sport debuts with digital instruments arranged on three levels and tailored to motor racing 5.