Ford Supplier On Board Agreement

As Ford Motor Co. Alcoa aluminum chosen for the F-150 pickup, this contract had a high price for the supplier, says one of its owners, who is now fighting for control of the company. In 2013, Alcoa spokesman Kevin Lowery told Automotive News that the company had agreed to share its technology „at the request of automakers,“ did not name Ford. Lowery also confirmed that Alcoa had approved its coating on Chemetall, a German supplier of chemical treatments for metals and plastics. According to Elliott`s critical analysis, Alcoa`s agreement provided rival aluminum supplier Novelis with a competitive advantage in its business. „Ford pushed Arconic to share its innovations with Novelis,“ Elliott`s report reads. „Novelis is the no.1 car plate supplier. Arconic did the job. Novelis got paid. This is one of the oxen behind Elliott`s initiative to change management at Aronic Inc., the aluminum parts industry that was split by Alcoa last year. Elliott, which owns 13.2 percent of Arconic, lobbied for the resignation of Arconic CEO Klaus Kleinfeld last month and sought more representation on Arconic`s board of directors. Last week, Arconic`s board of directors issued a letter to shareholders asking them to oppose what it called Elliott`s „questionable tactic.“ The board drama is at odds with the escalation of competition between the suppliers that dominate the North American automotive aluminum market, Arconic and Novelis. Companies are watching the automotive industry`s plans to reduce the weight of vehicles.

By 2025, the average North American vehicle will consume 500 pounds of aluminum, up from 423 pounds in 2014, according to research firm Ducker Worldwide. While traditional steel bodies are constructed with simple welds, aluminum parts are difficult to weld because the oxides on the surface of the metal can hinder a strong bond. Alcoa 951, applied by spray or dive, is not influenced by welding or punching. A Ford spokeswoman declined to discuss the dispute. Novelis and Elliott could not be reached for action. Aluminium hoods, lids and door panels have become commonplace in recent years as automakers have tried to reduce the vehicle`s weight. But to turn the F-150`s body into aluminum, Ford needed a breakthrough to connect the parts. Aluminium sales in North America are booming. In the first quarter, Arconic`s automotive aluminum sales increased 43 percent from the previous year, and the company expects revenue of $1.3 billion in this segment, which is six times higher than in 2013.