Seeking the Light - Aluminum Jumps in Detroit

The spotlight at this year’s Detroit Auto Show focused most intensely not on virile sports cars or new electric vehicles, but on Ford’s unexpectedly mainstream F-150 pickup truck. The 2015 model, which has been under development for five years, was able to shave off 700 pounds of weight through extensive replacement of steel parts with aluminum parts. As Randall Scheps, the Automotive Marketing Director for the global aluminum company Alcoa put it, “that’s like removing a Harley-Davidson from the back of the truck.”

Alcoa will be a primary supplier for this transition to aluminum F-150s—the most popular car in America, with hundreds of thousands manufactured every year—and is capitalizing on a tremendous business opportunity. The amount of aluminum body sheet content in North American vehicles is expected to quadruple by 2015, and increase tenfold by 2025 from 2012 levels. “Consider the management challenge of having a business that has been essentially flat for the past 15 years and taking it through a 10x increase in volume,” said Scheps. “This hits every part of the business, beyond just plant and facilities. It hits engineering people, supply chain people, sales people—really, every element of the business.”

Scheps was speaking as a guest lecturer in “Natural Capital: Risks and Opportunities in Global Resource Systems,” offered by the Yale School of Management. The class is taught within Yale’s innovative Global Network for Advanced Management program, which comprises 25 top business schools from around the world (including Yale) collaborating to understand the challenges and opportunities posed by global markets. Participating schools span more than 20 countries and 5 continents, from the Philippines to Ghana to Costa Rica; enrolled students who cannot attend in-person watch live video feeds and take part in discussion through online chat rooms.

This particular class was held on January 23rd and revolved around the emergence of aluminum in the automobile market. The metal has edged its way into car manufacturing over the past four decades, through substitution with steel in heat exchangers, wheels, engines, and hoods. These changes were driven by industry recognition of certain performance benefits of aluminum, and by changing consumer demand. In the last decade, consumers have demonstrated a growing interest in vehicles’ miles-per-gallon ratings. Lightweight aluminum was one relatively straightforward way to meet these new expectations.

And while the development of Ford’s new F-150 is outwardly the most recent chapter in this historical progression, it represents an entirely new scale of aluminum application driven by a shifting regulatory landscape. In August of 2012, the Obama administration issued new fuel economy standards, known as Corporate Average Fuel Economy, or CAFE.  The rules mandate that cars achieve an average of 35.5 miles per gallon by 2016, and 54.5 m.p.g. by 2025. In the search to shed weight without reducing automobile size—a requirement of CAFE—auto manufacturers alighted naturally on aluminum. (Ford has not yet released the m.p.g. gains offered by the new F-150.)

“What carmakers are concluding,” said Scheps, “is that in order to get to these goals without downsizing, without sacrificing the performance of the car, they will have to make these cars lighter.”

Manufacturers are searching across the board for innovations that provide even the most marginal improvement: revisiting tire treads might save one tenth of a mile per gallon; newly designed side mirrors could save the same. Meanwhile, thoroughly replacing steel with aluminum offers a nearly five miles-per-gallon improvement “in one shot,” said Scheps. “That’s amazing for one single change.” As he sees it, midsize SUVs of the future will be identical in terms of safety and performance, but they will weigh 1,000 pounds less.

The path to this future presents a few challenges. First, car manufacturers will need to undertake small factory retrofits to handle aluminum instead of steel. The robots on the assembly line, for instance, will need to be fitted with new ends. “But this is as close to a drop-in replacement as you’re going to get,” said Scheps. Carbon fiber composites, which a student asked about in the online forum, are a much more complicated solution to the challenge of weight.

Beyond manufacturing changes, auto mechanics will need to learn to work on aluminum, which has different properties than steel. Ford, in anticipation of this challenge, has announced a training and certification program that has already gone online.

Internally, Alcoa faces pressure to meet the F-150’s exacting production schedules. The company is investing $575 million in the expansion of two U.S. aluminum plants, one in Iowa and one in Tennessee. (Alcoa is also building an auto supply plant in Saudi Arabia to help meet growing European automotive demand.) “The auto industry has done a lot of work taking all the fat out of its supply chain. There may be only a few days between the time we ship our materials to the time they’re actually formed into a car or component,” said Scheps. “These manufacturers have a very rigid set of dates and we need to comply with them.”

Alcoa is also committing resources to a deeper focus on customer service. Steel has long been the foundation of the automobile industry, deeply embedded in its operations for a century. As Alcoa expands into this same space, it’s working hard to cover a fair amount of lost ground with regard to industry knowledge and customer relations. But Scheps is ultimately optimistic. When it comes to the transition to lightweight materials—seeming more rapid and inevitable each year—“I think we’ve got technology and physics on our side,” he said.

For full video of lecture, check out this link.

Dylan Walsh graduated from the Yale School of Forestry & Environmental Studies with a Master of Environmental Management degree in 2011.  An experienced editor and writer with particular focus on science/environment, he regularly contributes to The New Yorker online, The New York Times, The Guardian, Yale e360, among other publications.