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Friday, 07 February 2014 01:11

Ford’s 2015 F-150 Launch Focuses Repairer Concern on Costs and Benefits

Ford has spend 5 years developing its 2015 F-150, the first full size pickup with a 95% aluminum body, and it has invested heavily in a market segment it already dominates. Ford started work in 2009 on the truck program that yielded the F-150, according to COO Mark Fields in assessing its ability to service, manufacture and purchase material before deciding on an aluminum body.

 

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What are the costs of this radical reengineering to consumers? Ford has implied the sticker price will be “roughly the same as the current F-150, from $24,500 to $55,000.”

Maybe. But what is indisputable is aluminum’s inherently higher price. Aluminum sheet currently costs $2.20 per pound vs. steel at 75 cents per pound. Analysts say you can roughly calculate the price premium of the new F-150 by figuring $2 extra per pound saved (700 lbs.)

If those estimates are correct, the new F-150 should cost about $1,400 more than its predecessor. Ford also charges an extra $2,095 for adding the EcoBoost engine option on the current F-150.

Repairers though have different concerns: the impact of probable higher insurance rates; the complexity of aluminum repair; and the potential impact on the iconic brand they’re used to working on.

Writes Craig Trudell in Automotive News, “Less than 10 percent of the more than 30,000 independent repair shops in the United States are certified and meet training and equipment requirements to work with most aluminum auto body parts, according to an estimate by Darrell Amberson, ASA chairman. While some dealerships do in-house body work, independent businesses handle the vast majority of collision repair in the United States, he said.

“Ford is betting buyers will accept what it estimates will be a 10 percent jump in costs to insure the pickup in return for improved fuel economy, towing and payload. Ford must also get the aftermarket industry up to speed as it debuts the highest-profile vehicle ever to swap steel for aluminum.”

“You don’t get any more mainstream than the F-150,” Amberson, who is also vice president of operations for LaMettry’s Collision Inc. in Minneapolis.

Insurers see the material as more of a liability and Ford expects rates on the new F-150 to be about 10 percent higher than its predecessor. Ford has said it isn’t worried about this because the current F-150 is now about 10 percent cheaper to insure than competing trucks, said Doug Scott, Ford’s truck marketing manager.

But repair shops need separate hand tools for aluminum and steel such as wire brushes, grinders and sanders, because corrosion can happen when dissimilar metals come in contact with one another. The repair industry also has less experience with differences in how aluminum springs back from impacts compared with steel.

“Aluminum has a very poor memory and it resists straightening attempts,” noted Jeff Poole, a coordinator for I-CAR. “Experience really pays dividends here, and this is where we’ve got a learning curve ahead of us.”

Ford’s internal data show that 90 percent of customers live within two hours of a capable repair facility for today’s F-150, and 80 percent are within 30 minutes, Ford’s Scott said. Buyers of the aluminum-bodied F-150 will have the same access by the time it arrives in dealerships late this year, he said.

“We’ve just been waiting for the reveal to unveil a certification process for dealer-owned body shops and the independent channel,” Scott said.

Once the decision was made to go with the material, Ford was able to select a military grade high-strength alloy, thicker than what’s used in the current truck, because aluminum is about one-third the density of steel, Fields told reporters.

“The new F series is going to be more dent- and ding-resistant,” he said. “Our engineers have great tests where they’re dropping bowling balls. We’ve actually been testing this with a number of our customers, in the construction industry, the mining industry, to help us.”

Residual values for the new F-150, which measure how well the truck retains its worth after years of ownership, could decline because of higher insurance costs.

“The automakers can force their certified body shops to be able to work with aluminum, but that still could narrow down the choice and the scope of shops that consumers and insurance companies will have,” Larry Dominique, the president of ALG, which has forecast residual values for almost 50 years. “This will work itself out, but it could take 10 years.”

Ford produces its F-series trucks in much higher volume than other aluminum-centric manufacturers do. Past examples of aluminum use in auto bodies are inconsistent in terms of whether insurance rates rise and affect ownership costs that play a role in forecasting residuals, Dominique said. “Truck owners are so damn loyal,” he said.

Manufacturing experts and steel-industry advocates say that moving to aluminum will require fundamental changes to how Ford truck bodies make their way down the assembly line.

Ford is adding thousands of salaried workers including technical engineers to support new-product introductions and assigned Fields the task of honing its processes.

The complicated switch to aluminum from steel in the F-150's body contributes to IHS Automotive's estimate that Ford will need to take about six weeks of downtime at each of its truck plants to retool and swap out robots and machinery.

However, Ford estimates that 80 percent of its customers are or will be comfortable with its use of aluminum because they know it in other applications, such as with toolboxes and ladders that need to be both strong and light, Scott said.

The ability of the industry to prove it can handle collision work on the new F-150 will be tested soon after the truck reaches the market, said Amberson.

“People don’t wait until the vehicle is a few years old to start having accidents,” he said. “We can see them very early on.”

It’s expected the first F-150s will hit dealerships in the third quarter. Ford said last week that the truck will go on sale in the fourth quarter.

“This is the biggest bet of the show and maybe one of the biggest bets ever in the car industry,” Mike Jackson, CEO of AutoNation Inc., said in an interview.

“Ford is going to have to execute, and building at that volume in aluminum has never been done in the history of the automobile business. And there are reasons it hasn’t been done: It’s expensive, and it’s complicated and it’s difficult to work with.”

It’s a lot to ask” [of dealers], Jackson said. “But that’s the price of leadership.”

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