Ford’s Trade-In: Truck to Use Aluminum in Place of Steel – by Mike Ramsey (Wall Street Journal – July 26, 2012)

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ALLEN PARK, Mich.—In this suburb just west of Detroit, Ford Motor Co. F +0.45%is working on one of the biggest gambles in its 108-year history: a pickup truck with a largely aluminum body.

The radical redesign will help meet tougher federal fuel-economy targets now starting to have wide-ranging effects on Detroit’s auto makers. But Ford will have to overcome a host of manufacturing obstacles, plus convince die-hard pickup buyers that aluminum is as tough as steel.

Ford is hoping the switch to the lighter metal will cut the weight of its F-150 truck by about 700 pounds, according to Ford executives familiar with the company’s plans. That is roughly a 15% reduction for the F-150, which is the company’s most popular pickup in the U.S., favored by farmers and suburbanites alike. Such a reduction would enable Ford’s trucks to go farther on a gallon of gasoline, and open the door to other changes, such as the use of smaller engines, that can further boost fuel economy. Along with the aluminum makeover, the new F-150 also is getting a more muscular look, according to one Ford designer.

In the summer of 2011, the Obama administration pushed through new fuel-economy regulations that would require the U.S. vehicle fleet to average 54.5 miles per gallon by 2025. The requirements ramp up fuel economy goals for vehicles of different sizes each year.

The new Ford truck is being designed to come out in 2014 capable of hitting the increasing fuel economy standards through 2020, one of the executives familiar with its plans said. That would equate to roughly a 25% improvement in fuel economy. One of Ford’s most popular trucks, the 2012 F-150 four-wheel drive with the 3.5-liter V6 engine, now gets 17 miles per gallon combined city and highway mileage.

Across the industry, auto makers are pouring money into new technology to meet the standards. At General Motors Co., GM 0.00%nearly every vehicle is being fitted with a hybrid-electric system that captures energy when the vehicle slows and uses it to boost power when it accelerates. Several other car makers are designing engines that shut off at stop lights to save fuel.

Other car makers also are embracing aluminum. Novelis, the world leader in rolled sheet aluminum and a subsidiary of the Aditya Birla Group, is tripling its U.S. production capacity of automotive sheet aluminum, used to make body panels.

Few have as much at stake as Ford. The F-series is one of the most profitable motor-vehicle lines in the world. In 2011, a third of Ford’s $8.8 billion global operating profit was generated by F-series sales, according to a Barclays estimate. Since 1982, F-series trucks have outsold every other vehicle in the U.S. market. The new pickup will be coming at a key time for Ford, which this week said second-quarter net income sank 57% because of weakness in Europe.

The aluminum body is being used for the F-150 only; the larger F-250 and other Ford heavy trucks don’t fall under the new fuel-economy standards.

There are currently 10 different versions of the F-150, starting in price from $23,500 to $49,030. Last year, Ford sold 584,917 F-series trucks of all stripes in the U.S. Ford doesn’t break out sales of the F-150 from other F-series models, but the F-150 accounts for about 75% of the total, according to registration data collected by Experian Automotive.

For the rest of this article, please go to the Wall Street Journal website: http://online.wsj.com/article/SB10001424052702303612804577531282227138686.html

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