“GM Secures Aluminum for Trucks” – Wall Street Journal, 19 February 2014

Feeling the competition from Ford’s 2015 all-aluminum F-150 and pressure from Obama’s new fuel efficiency standards, GM is looking to build an all-aluminum pickup truck, scheduled to be unveiled in 2018. Both Ford and GM are working with aluminum suppliers Alcoa and Novelis for aluminum sheeting.

Before, GM wasn’t seeking to create an all-aluminum body pickup, but rather manufacturing lighter steel-bodied trucks. Rather than invest in aluminum—which can be very costly—GM decided to produce two small trucks for 2015, the Chevrolet Colorado and GMC Canyon. Both have improved fuel economies.

Chrysler also hasn’t made the dive into aluminum: instead, the company has decided to increase the mileage of its still all-steel Ram trucks with improved transmissions, axles and engines. The slated Ram 1500 diesel will get 28 miles to the gallon, a vast improvement.

In 2013, GM sold almost 665,000 of its two truck models, and Ford sold 763,000 of its F-series trucks. Both make a profit of $7,000 from an individual sale. Ford, with it’s all-aluminum F-150, is still ahead of the curve. GM’s 2014 models of the Chevrolet Silverado and GMC Sierra trucks undersold in September with numbers worse than the previous year.

In 2008, GM mulled over the idea of creating an all-aluminum body, but decided that the switch would be too costly and reckless during the automotive industry’s decline. Now, GM says that it can trump Ford’s head-start through breakthrough welding and assembly techniques.

The move from steel to aluminum is indeed costly. This year, Ford will shut down its assembly plants for 13 weeks to set up the new equipment required to manufacture the aluminum truck.

Developed and Written by Dr. Subodh Das and Tara Mahadevan

March 28, 2014

Phinix LLC

Copyright 2013. All rights Reserved by Phinix, LLC.

www.phinix.net    skdas@phinix.net

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“Fuel-Efficiency Rules Are Already Raising Costs in Detroit” – Wall Street Journal, 22 January 2014

Even though GM and Chrysler have paid off their auto-bailout loans, they are still under the thumb of Uncle Sam; elements of Obama’s Climate Action Plan do not only extend towards power plants, but automakers as well. According to the Climate Action Plan, car companies’ products have to average 54.5 miles per gallon by 2025. This, however, requires huge design changes that are going to be a big blow to profit margins.

America’s best-selling vehicle, the Ford F150, is getting a complete redesign. from the inside out. It will be the first truck and large-volume vehicle to have an all-aluminum body, which will lower its weight and increase its fuel efficiency. Obama’s Climate Action Plan requires full-size trucks to have a better fuel efficiency, up to 30 mpg from the current 20 mpg.

Switching to aluminum, though better for the environment, is an expensive move. As we reported last month, converting to aluminum means higher material costs and new manufacturing machinery. While the price tag is high, Ford can’t fight the new regulations, and is instead doing all it can to effectively market the innovation behind its newly redesigned products, the F150 and Mustang—the latter redesign offers a never-before-seen turbocharged four-cylinder engine. Each sale of the redesigned F150 contributes an additional $10,000 to Ford’s bottom line.

GM, on the other hand, is creating a whole new midsize truck to meet Obama’s requirements, which they believe will be less costly. Chrysler, instead, is spending more on nine-speed transmissions and diesel engines.

Obama had hoped that the market for electric cars would increase; as a bid in that direction, an element of the Climate Action Plan allows automakers to acquire mpg credits for manufacturing zero-emission vehicles. However, the demand for electric vehicles is still low, proving that that kind of car is still a niche product. Pricing for electric cars start at $40,000 and only increase from there.

While it is always painful to have a winner and loser, the “materials selection war” (steel vs. aluminum) is a long-term societal consideration and climate change mitigation, where aluminum is the ultimate winner. These trends will force America to increase the recycling of post-consumer aluminum products—as opposed to landfill and scrap export—and to also increase the design and manufacturing of recycle-friendly alloys.

There is simply not enough expensive and energy-intensive primary aluminum capacity available to meet higher aluminum demand of 100 million, and growing, cars per year.

See also:
Will All-Aluminum Cars Drive Metals Industry?
A Clean Car Boom
GM Planning Strict Diet for New Pickup Trucks

Developed and Written by Dr. Subodh Das and Tara Mahadevan

February 12, 2014

Phinix LLC

Copyright 2013. All rights Reserved by Phinix, LLC.

www.phinix.net    skdas@phinix.net

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