Ford Motor Co. (NYSE: F) and Alcoa Inc. (NYSE: AA) continued their collaboration to produce the next-generation of automotive alloys in an announcement after the markets closed on Monday. The big announcement is that Ford will use Alcoa’s Micromill material in multiple components on the 2016 F-150.
Ultimately Ford will become the first automaker to use the advanced automotive aluminum commercially. Alcoa’s Micromill technology, previously announced in December of 2014, produces an aluminum alloy that is 40% more formable than today’s automotive aluminum.
In more basic terms, the increased formability of Micromill aluminum makes it easier to shape into intricate forms, such as the inside panels of automobile doors and external fenders. The increased material strength allows for the use of thinner aluminum sheet without compromising dent resistance.
Some background on Micromill: it is the fastest, most productive aluminum casting and rolling system in the world, combining multiple technologies into a streamlined production system. A traditional rolling mill takes around 20 days to turn molten metal into coil. Micromill is capable of that in just 20 minutes.
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Raj Nair, Ford group vice president and chief technical officer, Global Product Development, said:
Light-weighting enables us to design vehicles with great customer attributes — like the F-150, which can tow more, haul more, accelerate quicker and stop faster than the previous F-150, and is more fuel-efficient than ever. This collaboration supports our continued drive for innovation, as we research automotive applications for even greater light-weighting.
Separately, Klaus Kleinfeld, Alcoa’s chairman and CEO, added:
Alcoa’s breakthrough Micromill technology offers highly differentiated automotive material with strength, weight, formability and surface quality combinations previously impossible. 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.
Shares of Ford closed Monday up 0.5%, at $13.78 in its 52-week trading range of $10.44 to $16.77. The stock has a consensus analyst price target of $17.41.
Alcoa shares closed down 2.8% to $9.38. The consensus price target is $13.54, and the 52-week trading range is $7.97 to $17.75.
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