25 08, 2014

The Great Aluminum Undertaking Begins

2015-06-18T15:33:04+00:00August 25th, 2014|

With the public on-sale date fast approaching for the F-150,Ford has begun overhauling its manufacturing plants to prepare for the rapid ramp-up for large-scale production of the aluminum-based vehicle. The last of the previous year’s models are finished, and beginning earlier this week, the focus switched to implementing and integrating new equipment to oversee the aluminum manufacturing process. From Bloomberg:

Ford Motor Co. (F), the second-largest U.S. automaker, has begun an eight-week closure of its Dearborn, Michigan, F-150 pickup plant to overhaul it for a new, aluminum-bodied version of the top-selling vehicle line in the U.S.

“This is historic for the industry, not just for Ford,” Joe Hinrichs, Ford’s president of the Americas, told reporters today at the company’s product development center in Dearborn. “To take the No. 1 selling vehicle for 32 years — it will be 33 soon — and convert it like this, at this volume, to aluminum, is historic and unprecedented.”

Michigan workers assembled their last 2014 F-150 early on Aug. 22 and crews began tearing up the plant to make way for the new equipment necessary to manufacture parts out of aluminum, Hinrichs said. The conversion began one day ahead of schedule, he said, and this weekend, 1,100 trucks will stream into the plant to deliver the new tools. By mid-October, the factory will be building the “production version” of the 2015 model, he said.

“This is a massive undertaking, one of the bigger logistical challenges we’ve ever seen,” Hinrichs said. “It’s been orchestrated literally by the minute, by the truckload.”

This is just the first step for Ford as the company re-evaluates its North American manufacturing plan. For more details, read the entire Bloomberg article.

18 08, 2014

Steel vs. Aluminum: A History Lesson

2015-06-18T15:33:04+00:00August 18th, 2014|

Steel may have been the flag-bearer for years and years, but then along came aluminum. And with much resistance, the industry reluctantly gave aluminum a try. Soon, the transition was tangible and the result was a manufacturing revolution.

Sound familiar? Given all the hype and news about the Ford F-150, you’d probably think that we were discussing the auto industry. However, the Motley Fool gives us a history lesson on how this happened before:

The year was 1934. After lots of coaxing, the American Can Co. finally persuaded Krueger Brewing to try selling its beer in steel cans. It worked, and by the end of 1935 23 different brewers were selling their beer in steel cans, which were easier to sell because they were lighter and more compact than bottles and quicker to fill.

Steel, however, was pushed out of the market in the 1970s after Coors (NYSE: TAP  ) developed the first aluminum beer can. These were cheaper to produce, even lighter in weight, and took less time to chill. The nationwide switch to aluminum cans created a major structural demand shift for the aluminum industry.

That same structural shift is about to happen again. This time, the Ford (NYSE: F  )  F-150 is replacing 1,500 pounds of steel with 900 pounds of aluminum in the all-new 2015 model. With this shift, aluminum appears poised to slowly take over the auto industry, much like it took over the beer can industry a few decades ago.

Aluminum has slowly been pushing steel out of cars for decades. In 1975 less than 100 pounds of aluminum could be found in the average car. Today that number has risen to 343 pounds of aluminum.

The rest of the article focuses on the differences in material properties between steel and aluminum. Together, it makes a valid argument as to why manufacturers are starting to see aluminum as the smart choice.

12 08, 2014

CNBC: Aluminum’s Time To Shine

2017-01-26T23:37:29+00:00August 12th, 2014|

With such an intense focus on the auto industry and the launch of the Ford F-150, it’s easy to lose sight of the bigger picture: that aluminum as a whole is used many different types of manufacturing all over the world. From that perspective, the momentum is as strong — if not more — than the microcosm of the auto industry. CNBC recently highlighted this in a report, and the outlook is very positive.

From CNBC:

As sentiment turns increasingly bullish towards aluminum amid a backdrop of tight supply, analysts say the once-shunned base metal is finally at a turning point.

The metal has been trading near seventeen-month highs above $2,000 per ton in recent weeks and entered a bull market in late July, up more than 20 percent since a 2014 low of $1,677 in February.

“We’re probably now at a point where the aluminum market may be turning and that has everything to do with supply shutting down in China and as supply-demand re-balances across the entire industry,” Gaurav Sodhi, resources analyst at Intelligent Investor, told CNBC on Thursday.

For a more detailed look at the world aluminum market, including the impact of recent movement in the Chinese manufacturing industry, see CNBC’s full article.

6 08, 2014

Jaguar Ready To Deploy Aluminum Architecture

2015-06-18T15:33:04+00:00August 6th, 2014|

Jaguar is ready to commit full-scale to aluminum. The British automaker recently announced that its new line of vehicles will be based on a new flexible aluminum architecture. Jaguar is looking at the Paris auto show in October to unveil the first of this line. From Automotive News:

Jaguar is moving to a new flexible aluminum architecture for future vehicles.

The XE sedan debuting in October at the Paris auto show will be the first to use the architecture. It will be followed by a compact crossover that will take styling cues from the C-X17 concept unveiled last fall at the Frankfurt auto show.

From there, Jaguar will expand its lineup, with the goal of transforming the brand into a formidable competitor with the German makes. But Jaguar executives insist the brand won’t develop vehicles in every segment. They say they want Jaguar to remain a smaller player than its competitors.

Older vehicles such as the XK coupe and convertible, which would cost too much to engineer to meet new safety and emissions standards, are being killed off. The 2015 models will be the last for the XK coupe and convertible. Jaguar’s halo cars are now the F-Type coupe and convertible. U.S. sales of the coupe began in June. The convertible went on sale a year earlier.

While the aluminum body hasn’t yet trickled down to all of Jaguar’s vehicles, industry insiders believe it’s just a matter of time before the transition is made. For example, the popular XF line will see a redesign in the next 1-2 years, and it makes sense that Jaguar will use that as the aluminum transition point for design and manufacturing.

30 07, 2014

2015 Ford F-150 Prices Announced

2015-06-18T15:33:04+00:00July 30th, 2014|

August is here, and with it, the F-150 is getting closer to its public launch. You can tell the momentum is picking up as more publicity and news hits the wire. The biggest news, however, just came from Ford: the price. From the LA Times:

Ford has announced pricing on its groundbreaking new aluminum F-150 truck, due to reach dealers later this year. Though cheaper models will see only a modest increase in price over current, non-aluminum models, the price of Ford’s high-end editions will jump by more than $3,000.

The new 2015 F-150 XL will start at $26,615, while the XLT will start at $31,890. That’s a gain of $400 for each version, which together make up about 70% of all F-150 sales. The price of the midlevel Lariat is up $900 to $39,880, which includes a fully digital instrument panel and blind-spot monitoring.

At the high end of the F-150 lineup are the King Ranch and Platinum models. The 2015 King Ranch edition is up $3,615 to $49,460. The 2015 Platinum model will start at $52,155, an increase of $3,055.

Many observers expected a modest increase due to new manufacturing and materials, and there’s certainly some variation here. However, keep fuel savings in mind when you look at the big picture (official MPG hasn’t been released yet but is expected to be higher than 2014’s 17/23).

24 07, 2014

CNBC: Invest In Aluminum!

2015-06-18T15:33:04+00:00July 24th, 2014|

Investors take note: the experts are saying that aluminum is the way to go. More specifically, that’s Dennis Gartman, Editor and Publisher of The Gartman Letter and CNBC correspondent. On a recent broadcast, Gartman told the channel that aluminum is the foundation of the global economic recovery. From CNBC.com:

“Buy aluminum first,” Gartman said. “That’s the best commodity trade out there.”

In an interview with “Futures Now” on Tuesday, the Commodities King said aluminum is not only the best way to play the record run in stocks, but could also be the best proxy for investing in the global recovery.

“Everyone laughed at me when I started buying aluminum nine months ago,” joked Gartman. “You are going to see a larger off take of aluminum going into automobile production. It’s the easiest way to meet EPA requirements for mileage is to make the automobiles and trucks lighter, and aluminum does that relative to steel and you’re going to be selling, we’re going to be selling, everybody’s going to be selling a lot of automobiles for the Chinese.”

Aluminum futures are on a tear this year, up nearly 11 percent, outpacing gold, silver, copper and stocks.

And according to Gartman, aluminum may have even replaced copper as the best commodity to measure economic growth.

So there you have it. If you’ve been wondering how to manage your investments, the experts have spoken: aluminum is the best investment and the best way to measure the status of the global economy. Don’t say we didn’t warn you.

18 07, 2014

Auto Industry Sees F-150 As Aluminum Catalyst

2015-06-18T15:33:04+00:00July 18th, 2014|

The launch of the new Ford F-150 (AKA our favorite topic over the past year or so) was the biggest step towards mainstream usage of aluminum in by auto manufacturers. While the unveiling was met with a mix of excitement, curiosity, and skepticism, the reviews wound up showing that Ford made the right choice. Now, the popular opinion has changed — rather than the F-150 being Ford’s giant gamble, automakers around the world see it as a critical choice that will change the industry. From the Detroit Free Press:

 

By 2025, 18% of all vehicles will have all-aluminum bodies, up from less than 1% now, according to a recent report from Ducker Worldwide.

 

The industry is now engaged in a conversation about the pratfalls and possible solutions of using aluminum on a high-volume vehicle. The challenges are being solved with new ways of joining aluminum and steel, manufacturing with speed and efficiency, crashworthiness and repairability, cost and consumer acceptance.

 

Ducker forecasts that next-decade aluminum will be used for 75% of the panels and parts on pickups, 24% of large cars, 22% of SUVs and 18% of minivans.

 

The F-150 is an industry catalyst, said Gary Silberg, national auto industry leader at KPMG. “They’re figuring it out. People are studying it and making it a reality.”

 

From questionable decision to industry catalyst — the F-150 has come a long way since its unveiling at the Detroit Auto Show, and it hasn’t even gone on public sale yet. But in the coming months, people will be able to find out for themselves. Chances are, they’ll be just as impressed as the rest of the industry.

11 07, 2014

Alcoa’s Strong Earnings Bode Well For Industry

2015-06-18T15:33:04+00:00July 11th, 2014|

The aluminum industry feels like it’s gathering momentum from a range of sources. Mainstream media doesn’t always pick up on this, despite the huge spotlight created by the automotive industry. That’s why it was refreshing to see the impact of the earnings report from aluminum stalwart Alcoa.  From Marketwatch:

Stock reaction : Alcoa’s stock has rallied 15% since the end of the first quarter through Monday, and is up 39% so far this year, versus gains of 5.6% and 7%, respectively, for the S&P 500. Since Sept. 23, 2013, when the stock was booted out of the Dow Jones Industrial Average, the shares have soared 78%, while the Dow has advanced 11% over the same period. However, the stock hasn’t had a great track record of rising after results. Looking back at the day after the company’s last 10 quarterly reports were revealed, the stock closed lower five times, according to FactSet.

Key points : Investors will keep an eye on Alcoa’s outlook for the global aerospace sector, given that the company announced last month that it acquired Firth Rixson for $2.85 billion to bolster its aerospace business. Analyst Anthony Rizzuto at Cowen & Co. believes the acquisition of Firth Rixson is part of the company’s transition away from being an aluminum producer to a specialty materials company.

Notice how Alcoa’s fortunes are tied more into the aerospace industry rather than automotive. That means that manufacturing teams across a range of industries see the benefits of going aluminum. Perhaps in the near future, seeing mainstream accolades will be the norm rather than a surprising find.

27 06, 2014

Ford Squashes Rumors About Delivery & Manufacturing Delays

2015-06-18T15:33:04+00:00June 27th, 2014|

The Ford F-150 and its aluminum body have gotten plenty of attention in 2014. With the launch imminent, rumors have started to swirl regarding delays and manufacturing difficulties. Is there any truth to this? Not at all, says Ford President Joe Hinrichs. From Time Magazine:

“Everything is on schedule and everything is going as planned,” Ford Americas President Joe Hinrichs told reporters, speaking at Ford’s headquarters in Dearborn, Michigan (via Automotive News), adding that he was “very confident in this vehicle.” Morgan Stanley’s analyst Ravi Shanker had said earlier that Ford’s planned factory retooling, which it has to perform in order to produce the new pickup, would result in “slow changeover, with tight supply.”

Ford has noted the planned retooling would temporarily deplete its production by over 90,000 F-Series pickups, reducing company sales and profits. Furthermore, margins are expected to be lower on the new aluminum-bodied F-150. But Ford views all of that as necessary back-stepping to be first to market with a truck that uses a combination of “military-grade aluminum and high-strength steel,” and that’ll weigh roughly 700 pounds less than the version it’s replacing.

Of course, only time will tell whether or not Ford is putting on a brave face on top of manufacturing delays. But we’ll take it all at face value and assume things are full speed ahead for now.

20 06, 2014

Aluminum-Air Batteries May Lead New Generation Of Hybrid Cars

2015-06-18T15:33:05+00:00June 20th, 2014|

The typical hybrid car of 2014 switches between a lithium-ion battery and traditional gasoline combustion to maximize efficiency. But what if there was a way to swap out the gas part of the equation for something better? And what if that something was aluminum?

Well, not straight aluminum, but an aluminum-air battery. Isreali start-up Phinergy is currently road testing a hybrid that uses the standard lithium-ion system and a new aluminum-air system. The result is a drive range of a whopping 1,100 miles. From The Algemeiner:

Founded by CEO Aviv Tzidon, Phinergy‘s battery solution offers greater capacity than Tesla Motors Inc.’s Model S electric car, which can go for 300 miles between charges, and less expensive alternatives, with ranges of about 160 miles.

Phinergy’s prototype uses the lithium-ion battery for short trips and the aluminum-air battery for longer hauls.

Globes said: “The aluminum-air technology uses oxygen naturally occurring in the air to fill its cathode. Aluminum-air batteries discharge turns the metal into aluminum hydroxide, which can then be recycled to make new batteries. This makes it far lighter than liquid filled lithium-ion batteries to give the car a far greater range.”

The aluminum battery has to be replaced every few months, but its components are recyclable. Alcoa Canada partnered with Phinergy to produce the batteries, which were manufactured in Canada.

While Ford and other truck makers may be turning to aluminum to increase gas mileage due to mass properties, it’s good to see that our favorite metal is involved in other green initiatives. Perhaps even in a few years, aluminum-manufactured trucks will be powered by aluminum-air batteries!

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