With Its 2015 F-150, Ford Reminds the Industry How to Push the Limits

Ford's just-unveiled 2015 F-150 represents a new era of big investments in a rapidly changing, hyper-competitive, auto industry.

Jan 13, 2014 at 5:15PM

In an environment of intense global competition among auto manufacturers, it's time to push the limits -- and Ford (NYSE:F) is leading the way. The new 2015 F-150 that Ford unveiled today shows just how far the company is willing to go to set new standards.

G

2015 Ford F-150. Source: Ford Motor Company.

Ford's aluminum bet
"We will all remember this day," Ford chief operating officer Mark Fields told his colleagues the day Ford locked in aluminum contracts, according to The Wall Street Journal.

Taking cues from Tesla's Model S, the Jaguar lineup, and the Audi A8, Ford moved to an aluminum-alloy body built on an all-new, high-strength-steel frame. Up to 700 pounds less weight, the new material required significant investment for the company to adopt the military-grade, aluminum alloy in production.

Any significant change to the production process of the Ford F-150 is a major change for the company. The F-150, which is part of Ford's F-Series truck lineup, has been America's best-selling truck for 37 consecutive years, and its best-selling vehicle for 32 years. Even more, the F-series trucks account for an estimated 40% of Ford's global profit, according to estimates from Goldman Sachs

With F-150 pricing beginning at just $24,000, a move to a more expensive metal for the body is impressive. The Model S, with pricing that begins just under $70,000, is the lowest-priced aluminum vehicle in the U.S., according to the WSJ. An inside source told the Journal that the move to aluminum meant a massive multibillion-dollar investment. Unsurprisingly, Ford lowered its profit guidance for 2014 in December and cited heavy investments on product spending as one of the driving factors.

Changing industry dynamics
Ford's big bet on an aluminum body comes as a response to a U.S. government directive for an average of 54.5 miles per gallon among all automakers' full ranges of U.S. vehicles by 2025. The lighter body allows the new F-150 to sport a smaller 2.7-liter V-6 EcoBoost engine as one of the four engine options for customers. The new engine combined with the lighter body will help the company achieve fuel efficiency leadership among full-sized pickups, Ford global chief of product development Raj Nair hopes.

General Motors is taking a different route to improving fuel efficiency in 2014, returning to midsize pickup truck offerings for its 2015 models. The move will place the new 2015 GMC Canyon as direct competition to Toyota's popular Tacoma.

Beyond the government's requirement for improved fuel efficiency, customers are also showing greater interest. Ford says about 40% of F-150 buyers are now choosing the more efficient V6 engine over the traditional V8.

What's next?
Ford's multibillion-dollar bet on new production technologies and processes shows just how important fuel efficiency is to Ford today. Further, it's likely the beginning of similar big bets among global auto manufacturers. While there are major upfront costs to changes like this, investors should look forward to what is likely to be an era of bigger bets and a faster pace of innovation that will separate the winners from the losers.

There's no time for auto manufacturers to languish in technologies of the past, and Ford's big bet shows that it's willing to get its hands dirty in order to continue to set the standard among full-sized trucks.

A dividend strategy in a pricey market makes sense
One of the dirty secrets that few finance professionals will openly admit is the fact that dividend stocks as a group handily outperform their non-dividend paying brethren. The reasons for this are too numerous to list here, but you can rest assured it's true. However, knowing this is only half the battle. The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.

Fool contributor Daniel Sparks owns shares of Tesla Motors. The Motley Fool recommends Ford, General Motors, Goldman Sachs, and Tesla Motors. The Motley Fool owns shares of Ford and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers