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Smart Recycling Cuts F-150 Cost : News

Innovative recycling that sorts aluminum by type and returns it to suppliers will save Ford Motor Co. $124 per pickup, compared with using conventional recycling methods, when production of the 2015 aluminum-bodied F-150 starts this fall, says a stock analyst.

A report from CLSA Americas spells out the recycling system Ford is installing in its F-150 plants in Dearborn, Mich., and Kansas City, Mo. It says the more sophisticated recycling plan will cut the material cost of switching from the F-150's steel body to lighter, but more expensive, aluminum to $750 per vehicle.

Ford declined comment on the report.

The 2015 F-150 will use four different blends of aluminum alloy, the report says. The different grades of aluminum vary in thickness and in the amount of magnesium and other ingredients.

Under the advanced recycling plan, pneumatic scrap handling equipment will separate the four types of aluminum alloy and place them in separate containers, which will be used to haul the scrap metal back to aluminum suppliers Alcoa and Novelis, according to CSLA analyst Emmanuel Rosner.

The scrap metal is left over from the stamping process that produces fenders, hoods, door frames and other parts. Ford will have about 310 pounds of scrap aluminum per pickup, worth $1.20 per pound or $372.

If Ford skipped the step of separating the four grades of aluminum, the scrap would bring just 80 cents a pound, according to the report.

That premium amounts to a gain of $80 million per year for the company, according to the report. It says the cost of the recycling equipment is $60 million, so Ford will recoup its investment in less than one year.

Late this summer, Ford will share some details of the 2015 F-150's manufacturing process, said spokesman Mike Levine.

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