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OM in the News: Will the New Ford F-150 Be Tough Enough?

July 29, 2012

Just west of Detroit, Ford is working on one of the biggest gambles in its 108-year history: a pickup truck with a largely aluminum body. The radical redesign (a topic in Chapter 5) will help meet tougher federal fuel-economy targets. But as The Wall Street Journal (July 27, 2012) reports, Ford will have to overcome a host of manufacturing obstacles, plus convince die-hard pickup buyers that aluminum is as tough as steel.

Ford is hoping the switch to the lighter metal will cut the weight of its F-150 truck by about 700 pounds,  a 15% reduction. This would enable Ford’s trucks to go farther on a gallon of gasoline, and open the door to the use of smaller engines to further boost fuel economy. (Other car makers also are experimenting with aluminum. Novelis, the world leader in rolled sheet aluminum, is tripling its U.S. production capacity of  aluminum used to make body panels).

Few have as much at stake as Ford. The F-series is one of the most profitable motor-vehicle lines in the world. In 2011, a third of Ford’s $8.8 billion global operating profit was generated by F-series sales. But aluminum is more expensive than steel, and extensive use could drive up costs by $1,500, cut the F-series’ hefty profit margins, or push away price-sensitive customers. Aluminum also is trickier to work with. The switch will require investment in $100’s of millions  in new manufacturing equipment, and the use of auto-assembly techniques that pose challenges in high-volume production. A big headache is the lack of magnetism, requiring powerful and electricity-hungry vacuums to be used to pick up the aluminum sheets for transfer. Assembly plants now use giant magnets to move steel body panels around. Aluminum also is more springy than steel and it scratches more easily.

Discussion questions:

1. What are the main issues facing operations managers with this redesign?

2. What the threats and opportunities Ford faces?

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Andreas Wieland’s supply chain management blog for academics and managers

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