Ford Motor Company and Alcoa Inc. have entered into a joint development agreement that would give birth to vehicles sporting next-generation aluminum made through the New York City-headquartered aluminum producer's Micromill technology.
The effect of the agreement will be seen first on Ford's F-150 pickup trucks after it was announced that starting this fourth quarter, the trucks' steel parts will be replaced with equally tough but lighter aluminum alloy, Reuters has learned.
Given the popularity of Ford's F-Series pickup trucks since 1982, this is going to be a great deal for Alcoa but bad news for steel producers who would then be pressured to perhaps sell their products at a cheaper rate.
Tumazos Very Independent Research in Holmdel, N.J. analyst John Tumazos told TribLive: "It's not a good thing if you're AK Steel or ArcelorMittal or U.S. Steel. If Alcoa can make the aluminum cheaply, and they lower their price at some point, aluminum will gain more penetration versus steel."
In December, Alcoa first announced its Micromill technology that is capable of producing alloy that is two times as malleable as high-strength steel but is 30 percent lighter. Hence, it can easily be molded into particular shapes.
On Monday, Alcoa CEO Klaus Kleinfeld spoke of the Micromill technology in a statement saying: Alcoa's breakthrough Micromill technology offers highly differentiated automotive material with strength, weight, formability and surface quality combinations previously impossible."
Kleinfeld added, "This high-tech aluminum will give Ford a true material edge enabling greater design flexibility and better vehicle performance, making the concept cars of tomorrow a reality."
The partnership between Ford and Alcoa will become evident first on the Detroit-based automaker's bestselling F-series trucks before the company imposes the new alloy on future car models.
Ford product chief Raj Nair said to MarketWatch that there is a lot of potential in using aluminum for the company's vehicles. ""The fact that we're collaborating on technology at this scale shows a pretty big commitment on both our parts," he said.
