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Ford's Aluminium F-150 Production Begins: Fuel Efficient Pickup Truck may Become Key Profit Generator

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Ford has ignited production of its 2015 model of its best-selling F-150 pickup truck. The Dearborn, Michigan-based manufacturer hopes to one-up its competitors in the race to fuel efficiency by introducing a new model with a body made entirely from aluminum.

As auto manufacturers are pressed by a new government regulation that requires that all fleets must have an average fuel economy of 54.5 miles per gallon by 2025, Ford takes a big, risky step by modifying its biggest profit maker and introducing a new F-150 with roof, floor, hood, panels and a pickup bed made of aluminum. By foregoing steel for a lighter, albeit more expensive metal, Ford says the new pickup truck will be able to reduce fuel consumption by five to 20 percent.

On Nov. 11, workers at Ford's Dearborn-based manufacturing plant just a few miles from its corporate headquarters paused from their daily tasks to cheer on Brad Huff, the plant manager, and United Automobile Workers official James Settles, Jr. as they drove the first aluminum F-150 off the assembly line.

The vehicle is around 700 pounds lighter and has a body constructed from military-grade alloys that Ford claims are more durable than steel. It can also carry up to 12,200 pounds, more than Silverado's 12,000 pounds and the 10,500 pounds for the Ram.

"Is this a risk? Yes," says Ford executive chairman Bill Ford. "But it's one well worth taking. For our customer, this is a big, big leap forward."

For the last 32 years, Ford's F-series pickup trucks have been the best-selling vehicles in the United States, with one out of three vehicles sold in 2013 being an F-series truck. Ford made a total of 647,697 F-150s in its U.S. plants last year and brought in around 90 percent of its profits from the sales of these vehicles, according to Morgan Stanley.

The company stands to lose a lot if it encounters future production problems or if customers do not sign up for the all-aluminum trucks.

Ford CEO Mark Fields says the aluminum F-150s have undergone at least 10 million miles of testing and are just as powerful as the steel-bodied trucks. However, proof of these claims remain to be seen when the first new F-150s hit the open roads for real-world testing. One concern brought up by consumers is whether the aluminum body can resist dents and dings and if it can be easily and cheaply repaired.

Moreover, the introduction of the new F-150 couldn't have had worse timing, as gas prices have reached a four-year low. The national average for a tank of gas is pegged at $3. Fields, however, says gas prices are not likely to stay at such a level permanently, and even when a tank of gas cost $1.25, people were already clamoring for better fuel economy.

The Environmental Protection Agency (EPA) has set the current F-150's average fuel economy for combined highway and city driving at 19 miles per gallon. With the lighter body, the new trucks will have significantly better fuel efficiency, Ford says, but the final score will be determined by the agency before the trucks become available next month.

"These vehicles are not just vehicles to our customers," says Fields. "They're tools to help them do their job. This thing has to deliver."

If the aluminum F-150s prove to be a big hit, Ford could further cement its lead over other vehicle manufacturers in the truck market. Ford already surpasses General Motors, the country's biggest automaker, in terms of truck sales. Last year, General Motors sold its Silverado and Sierra trucks 100,000 units less than Ford's F-series.

"If it goes according to plan, Ford will have a substantial advantage in the area of lightweight materials," says Karl Brauer, senior analyst at Kelley Blue Book.

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