Steel producer tries to fend off automotive aluminum usage growth image

Last year, Ford – the second largest US automaker – rocked the supplier world by announcing its most popular and best-selling F-150 pickup truck would switch the design to being aluminum intensive, catching off-guard its steel supplier.

Today, ArcelorMittal, the largest global supplier of auto industry-grade steel has envisioned a two-stage strategy to try and fend off possible switches to aluminum of crucial clients – such as GM, Fiat Chrysler and Japanese automakers. The Luxembourg-based company has come up with a lighter blend of steel that has the same performance capabilities as the ones used until now – though it does just the same task as aluminum – drop the vehicle’s overall weight. They also tapped around three dozen engineers to work with auto manufacturers worldwide to see their vehicle redesigns and make sure there would be no further surprises, says Brian Aranha, chief of ArcelorMittal’s automotive business.

The automotive business division is ArcelorMittal’s most profitable, with Aranha saying the partnership with Ford that was lost on the F-150 “was on a large enough scale that it made us pay a lot of attention and adjust our approach.” Aluminum is lighter than steel and can be used for vehicles that need to lower their weight to achieve better mileage. But it’s also harder to weld and costs around 30 percent than comparable steel. The recent technology breakthroughs have eased some of the concerns lately, allowing Ford to construct the F-150 top selling pickup truck with a new, aluminum body. ArcelorMittal, the world’s largest steelmaker, sees a threat in other carmakers following Ford’s example and switching to aluminum.

Via Bloomberg