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Forbes.com
November 10, 2014
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Article Quotes;
In fact, Ford has been studying aluminum as an alternative to steel for 20 years. In the mid-1990s, it came very close to introducing an aluminum-bodied Ford Taurus, but the plan was scrapped on fears that consumers would balk at the $500 price differential.
Instead, Jaguar and Land Rover, Ford’s European luxury brands, became the guinea pigs. Jaguar introduced the aluminum XJ in 2003 followed by the XK in 2006, allowing Ford to try out its processes without betting the farm. By the time Ford sold Jaguar-Land Rover to Tata in 2008, the development work was far along. Still, at the price of aluminum, it was hard to justify the business case for a mainstream Ford model.
Alan Mulally brought a different perspective. The former Boeing BA +0.15% executive led the engineering team that developed the aluminum-bodied 777 airliner so when he became Ford CEO in 2006, he was already very comfortable with it. But he saw a problem in Ford’s approach, according to metallurgist Richard Schultz, a managing director at Ducker Worldwide, a Ford advisor. “He told them, ‘You have to get more money for your scrap. Think of it as jewelry. You’re spending a couple of bucks on this stuff and you’re throwing one-third of it on the ground. You need to keep the alloys separate and protect their value.”
It was an epiphany of sorts that suddenly changed the business equation. If Ford could maintain its aluminum scrap in pristine condition and sell it back to its suppliers at favorable prices for re-processing, it could put a big chunk of its aluminum outlay back in its pocket.
Novelis, the world’s leading aluminum recycler, helped Ford develop an innovative closed-loop recycling system that FORBES estimates will save the automaker as much as $280 per truck.
Instead of gathering up all the mixed metal scraps in its stamping plants, Ford installed $60 million worth of pneumatic scrap-handling equipment from Ohio Compass Systems that separates the aluminum alloys on conveyors and deposits them in separate containers to avoid contamination by other grades of metal. Every 22 minutes, a trailer full of aluminum is filled and shipped back to Novelis or Alcoa, another supplier, for reprocessing. Those companies melt it, add ingredients as necessary to rebalance the alloys, then roll it again and ship it back to Ford.
It’s a sweet deal. Instead of the usual 15 cents per pound that scrap steel fetches, Ford will receive about $1.00 per pound for its aluminum scrap.
Here is FORBES’ math, based on interviews with insiders at Ford, its suppliers, and multiple metal and automotive experts:
Aluminum is about three times lighter than steel. But because Ford had to use thicker sheet to maintain the same strength and handling characteristics of the old steel body, the replacement ratio is closer to 1.7. So Ford has to purchase about 855 pounds of aluminum sheet for each F-150, replacing 1,455 pounds of steel, according to Schultz.
Virgin aluminum prices vary on the London Metal Exchange, but currently run about $2,050 per metric ton, or 93 cents per pound. Add the required “Midwest premium” plus the cost of additional processing to transform it into coils of high-strength aluminum sheet and the total cost is about $2.19 per pound. Automotive steel, on the other hand, costs about 55 cents per pound.
In either case, when body panels are stamped, about one-third of the metal ends up as scrap. Thus, a net 575 pounds of aluminum replaces 975 pounds of steel. The net weight savings of 400 pounds costs Ford an extra $725 per truck.
Here’s where the recycling comes into play. By selling the shredded and segregated scrap back to its suppliers for about $1 per pound, Ford recovers about $280 per truck, narrowing that cost gap considerably.
What about the rest of the equation? Replacing the truck’s steel body panels with aluminum accounts for a little more than half the F-150’s 700-pound weight loss. Aluminum extrusions save an additional 50 pounds and a new high-strength steel frame saves 70 pounds. The rest comes from smaller engines and other lightweight components.
In fact, the switch to an aluminum body created a domino effect that freed Ford to make other once-unthinkable changes to the F-150, like a tiny-but-surprisingly powerful 2.7-liter Ecoboost engine option, smaller brakes and a lighter suspension, all of which were cheaper than previous versions and provided secondary weight benefits that further enhanced fuel economy.
More important, says Ford, there was no tradeoff in performance. The end result is a more efficient truck that’s 700 pounds lighter, and more capable, too, with a towing capacity of up to 12,200 pounds, best in the industry.
November 10, 2014
Article Quotes;
In fact, Ford has been studying aluminum as an alternative to steel for 20 years. In the mid-1990s, it came very close to introducing an aluminum-bodied Ford Taurus, but the plan was scrapped on fears that consumers would balk at the $500 price differential.
Instead, Jaguar and Land Rover, Ford’s European luxury brands, became the guinea pigs. Jaguar introduced the aluminum XJ in 2003 followed by the XK in 2006, allowing Ford to try out its processes without betting the farm. By the time Ford sold Jaguar-Land Rover to Tata in 2008, the development work was far along. Still, at the price of aluminum, it was hard to justify the business case for a mainstream Ford model.
Alan Mulally brought a different perspective. The former Boeing BA +0.15% executive led the engineering team that developed the aluminum-bodied 777 airliner so when he became Ford CEO in 2006, he was already very comfortable with it. But he saw a problem in Ford’s approach, according to metallurgist Richard Schultz, a managing director at Ducker Worldwide, a Ford advisor. “He told them, ‘You have to get more money for your scrap. Think of it as jewelry. You’re spending a couple of bucks on this stuff and you’re throwing one-third of it on the ground. You need to keep the alloys separate and protect their value.”
It was an epiphany of sorts that suddenly changed the business equation. If Ford could maintain its aluminum scrap in pristine condition and sell it back to its suppliers at favorable prices for re-processing, it could put a big chunk of its aluminum outlay back in its pocket.
Novelis, the world’s leading aluminum recycler, helped Ford develop an innovative closed-loop recycling system that FORBES estimates will save the automaker as much as $280 per truck.
Instead of gathering up all the mixed metal scraps in its stamping plants, Ford installed $60 million worth of pneumatic scrap-handling equipment from Ohio Compass Systems that separates the aluminum alloys on conveyors and deposits them in separate containers to avoid contamination by other grades of metal. Every 22 minutes, a trailer full of aluminum is filled and shipped back to Novelis or Alcoa, another supplier, for reprocessing. Those companies melt it, add ingredients as necessary to rebalance the alloys, then roll it again and ship it back to Ford.
It’s a sweet deal. Instead of the usual 15 cents per pound that scrap steel fetches, Ford will receive about $1.00 per pound for its aluminum scrap.
Here is FORBES’ math, based on interviews with insiders at Ford, its suppliers, and multiple metal and automotive experts:
Aluminum is about three times lighter than steel. But because Ford had to use thicker sheet to maintain the same strength and handling characteristics of the old steel body, the replacement ratio is closer to 1.7. So Ford has to purchase about 855 pounds of aluminum sheet for each F-150, replacing 1,455 pounds of steel, according to Schultz.
Virgin aluminum prices vary on the London Metal Exchange, but currently run about $2,050 per metric ton, or 93 cents per pound. Add the required “Midwest premium” plus the cost of additional processing to transform it into coils of high-strength aluminum sheet and the total cost is about $2.19 per pound. Automotive steel, on the other hand, costs about 55 cents per pound.
In either case, when body panels are stamped, about one-third of the metal ends up as scrap. Thus, a net 575 pounds of aluminum replaces 975 pounds of steel. The net weight savings of 400 pounds costs Ford an extra $725 per truck.
Here’s where the recycling comes into play. By selling the shredded and segregated scrap back to its suppliers for about $1 per pound, Ford recovers about $280 per truck, narrowing that cost gap considerably.
What about the rest of the equation? Replacing the truck’s steel body panels with aluminum accounts for a little more than half the F-150’s 700-pound weight loss. Aluminum extrusions save an additional 50 pounds and a new high-strength steel frame saves 70 pounds. The rest comes from smaller engines and other lightweight components.
In fact, the switch to an aluminum body created a domino effect that freed Ford to make other once-unthinkable changes to the F-150, like a tiny-but-surprisingly powerful 2.7-liter Ecoboost engine option, smaller brakes and a lighter suspension, all of which were cheaper than previous versions and provided secondary weight benefits that further enhanced fuel economy.
More important, says Ford, there was no tradeoff in performance. The end result is a more efficient truck that’s 700 pounds lighter, and more capable, too, with a towing capacity of up to 12,200 pounds, best in the industry.
