Ford’s Move to Aluminum is Paying Off

Ford Motor (F) took a big gamble in changing their F-150 pick-up bodies to aluminum. After some initial mis-steps, the strategy seems to be paying off.

It’s not like the old F-Series was broken. In 2014, U.S. drivers bought one every 42 seconds or so. A full-frontal switch to aluminum was a massive gamble, and an expensive one. Ford essentially rebuilt two of its biggest factories to crank out the new trucks, shuttering them for 13 weeks at the opportunity cost of all the F-150s it could have made in that time—more than 90,000 vehicles in all.

The change, however, is palpable. At Ford, they call it “the 50-foot test”—you can tell in 50 feet of driving the difference all that aluminum makes. Specifically, the 2015 trucks are about 700 pounds lighter, which makes them far more peppy and eager. Even with the smallest of the four engines Ford offers, the F-150 will go from a dead stop to 60 miles per hour faster than the Ford Fusion, its little cousin. “Just 10 years ago, that would have been complete science fiction,” Levine said.

Cruising in a pickup is a bit like crawling in a Lamborghini; it’s possible, but not natural. That’s not the case with Ford’s new moneymaker. A long haul on an interstate isn’t a low-gear grind.
Then there’s the heavy lifting. Every version of Ford’s pickup will tow a few hundred pounds more than previous iterations, with a max load of 12,200 pounds. Smaller, faster, and stronger, it’s like a linebacker, a mountain of muscle that can run the 40 in less than 5 seconds.

A lot of truck fans don’t really care about those things. They buy a pickup because it feels like riding around in your living room, with bigger windows and more places to put a drink. Ford didn’t mess with that experience.

The F-Series still has a center console capable of holding a bag of groceries, and its cabin is layered with enough trays and bins to store a family’s worth of iPhones and beef jerky. Meanwhile, Ford’s engineers lowered the window frames by two inches to provide even more visibility. It’s one of the most thoughtful touches, in addition to a snug, hand-size space at the bottom of the steering wheel that presents a perfect handle on long, straight roads. The one place Ford left some steel is in the wall behind the engine, sealing a cabin as quiet as a church.

Earnings are due out a week from tomorrow, and I’m expecting good results. Ford made 24 cents per share for last year’s Q3. The consensus for this year is 47 cents per share.

Posted by on October 19th, 2015 at 1:44 pm


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.