Could Ford’s aluminum F-150 reshape truck market?

David Gura Dec 25, 2013
HTML EMBED:
COPY

Could Ford’s aluminum F-150 reshape truck market?

David Gura Dec 25, 2013
HTML EMBED:
COPY

Ford is thinking about making some changes to its biggest moneymaker: F-Series pickup trucks. Ford plans to unveil a truck made out of aluminum, not steel, Bloomberg reports.

According to Michelle Krebs, a senior analyst with Edmunds.com, transitioning to aluminum has its challenges.

“Attaching it, you can’t just use normal welds, like you do on steel,” she explains. “Aluminum has some issues around the noise that you hear; so, you have to add deadening materials.”

That means there would have to be changes to the assembly line. Ford would do this, Krebs says, because aluminum is a lot lighter than steel, and that would make it easier to hit new fuel standards that are scheduled to take effect in 2016.

“I think this is a threat for steel makers,” says Andrew Lane, an equity analyst with Morningstar who covers metals companies. “Particularly those that are highly leveraged to the automotive markets.”

But steelmakers know they have the edge on price.

“There is a significant cost difference between steel and aluminum,” says Dave Sullivan, an analyst with AutoPacific.

Sullivan says using aluminum would affect Ford’s profit margins on the F-Series, but steelmakers know any transition like this would take time. Ford makes hundreds of thousands of F-Series trucks every year, and these changes couldn’t happen quickly.

As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.

Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.

Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.