Ford and Aluminum: Huge Corporation Makes Huge Bet

Article by :  Influencer, columnist, global business editor at Newsweek and The Daily Beast


My latest Slate column, which you can see here— is about the type of event that doesn’t get enough coverage, and that doesn’t happen often enough.
Often, when we talk about innovation and disruption, it’s in the context of a start-up, a lone entrepreneur, a band of rebels with nothing to lose. Those stories aren’t just romantic, they’re also largely true — Zuckerberg and Facebook, Jobs and Apple, Ray Kroc and McDonald’s, Henry Ford and the Model T. Upstarts risking everything.
But occasionally, a very large company, one with a hundred year history, huge legacy costs, and a significant market positions takes a leap into the unknown. That’s precisely what Henry Ford’s successors and heirs are doing now. Ford makes the F-150, which is not only the biggest selling pick-up truck in the U.S., but is also the biggest-selling passenger vehicle in the U.S. Ford sells about 700,000 of these each year. And, as we know, the big U.S. auto companies make most of their money on their pick-ups and SUVS So it’s not a franchise to be messed with idly.
But now, Ford is taking a huge leap. GM and Dodge are trying to adapt to a world of high-mileage vehicles by offering some options on their pick-up lines: a diesel engine here, a smaller engine there. Ford, however, is going whole hog. Starting this fall, as a result of a several-years-long process, it is going to be building the F-150 largely out of aluminum, instead of steel. Swapping one metal for the other will allow Ford to cut the weight of the vehicle, thus allowing it to significantly boost its efficiency
Importantly, Ford is not offering the aluminum-based F-150 as an option. it’s the standard. Henry Ford famously said that customers could have the Model T in any color they wanted provided it was black. Today, Ford is telling pick-up DRIVERS they can have the F-150 any way they want it provided it is made largely of aluminum.
That’s a huge risk for Ford. While it has been experimenting with prototypes, it is not sure that it can effectively and efficiently manufacture cars with these new materials in such quantities. It’s not sure how they will perform on the road. And it’s not sure how the customer base will react.
Of course, if it all works, Ford gets a huge win: a big p.r. victory, establishing a new standard for efficiency, and proving that a 100-year-old Fortune 500 company can take some pretty radical bets.

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