Steel Industry Gearing Up for Aluminum Challenge

DETROIT – When Ford unveiled the ’15 F-150 the first day of the North American International Auto Show and officially announced it featured a body and bed made mostly of aluminum, it did not come as a surprise to steelmakers. They had known about Ford’s strategy for several years after first learning about it on WardsAuto.com.

However, the sheer size and scope of Ford’s ambition to shift not only the F-150, but many more of its key products to aluminum-intensive construction, has sent a chill through the steel industry. Especially when the push seems to be coming from the top: Ford CEO and former Boeing executive Alan Mulally.

“I think over time we will see more and more aluminum across the entire product line,” Mulally tells WardsAuto at NAIAS here. “But the real value initially is in the larger vehicles, because you can take the most weight out.”

Depending on cab configuration, the automaker says the new F-150 will be up to 700 lbs. (317 kg) lighter than the current-generation truck, which has a traditional steel body and bed.

The steel industry sells about 25 million tons (22.7 million t) of steel annually to automakers, and overall light-vehicle production volumes are soaring back to pre-recession levels, so Ford’s moves are not expected to have an immediate catastrophic impact.

Even so, steelmakers clearly are shaken by the U.S.’ second-largest automaker adopting a strategy designed to replace their material on its highest-volume vehicles.

In recent years, steel’s major challenges have been confined to low-volume luxury vehicles such as the Audi A8 and Range Rover CUV.

“This was a wake-up call,” says Ronald Krupitzer, vice president-automotive market at the Steel Market Development Institute, an industry trade group.

The new threat is re-energizing steelmakers and forcing them to sharpen their focus on delivering new ultra-high-strength steels and advanced processes to market faster, Krupitzer says.

SMDI President Lawrence Kavanagh tells reporters at the auto show here the steel industry’s portfolio of advanced high-strength steels can provide a 25% to 30% weight reduction at 34% less cost than aluminum, and automakers can meet the U.S. CAFE target of 54.5 mpg (4.3 L/100 km) by 2025 without resorting to extensive use of alternative materials.

This is not the first challenge automotive steel producers have faced. In the 1980s and 1990s, General Motors launched a huge campaign to make plastic-bodied cars, minivans and pickup truck boxes. Plastic could provide more innovative designs, GM product planners argued. Plus, it did not dent or rust. And it was lightweight.

Steelmakers responded with unprecedented R&D efforts and a special auto/steel partnership to create lightweight cars that did not rust.

It turned out consumers did not see the value of GM’s plastic-bodied “dustbuster” minivans; the 2-seat Pontiac Fiero looked sporty but was a dog; and Saturn cars were loved because of their low price and great dealership experience, not their plastic panels.

Nobody talks much about plastic cars anymore.

Steel industry officials here seem confident they can avoid being displaced further by offering automakers a steady flow of new super-strong steel alloys that are easy to fabricate into lightweight structures and components and by dramatically undercutting aluminum in cost. 

Time and cost may be on the side of steel.

Forecasters have been predicting lightweight alternative materials would replace steel in automobiles for 60 years, yet the percentage of steel by weight in a typical passenger vehicle still is 50%-60%, about the same as it was in the 1950s.

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