Ford's 2015 F-150 in off-road action. Source: Ford Motor Company.
So what happens when a well-known automotive media company takes a sledge hammer to Ford Motor Company's all-new aluminum 2015 F-150 and claims repair bills could nearly double? The answer: It sets the truck enthusiasts and media folk on fire.
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Because the F-Series is such a critical factor to Ford's financial success, in terms of both revenue and profits, it's not surprising that Ford's public relations team responded with some positive news this week regarding the aluminum-bodied F-150. Here's the scoop.
Enter the sledgehammer Before we get to Ford's positive news, let's take a look at how this rising repair cost subject caught fire recently. The crew at Edmunds.com took a sledgehammer to their brand new 2015 F-150 and sent the truck off to the nearest dealership for repairs, to test the theory that aluminum vehicles are more expensive to repair than steel. The bill was expensive: The shop's normal aluminum labor rate was $120, compared to the normal rate of $60. Edmunds went through multiple scenarios and assumptions, including what the difference would be in labor time if working with aluminum took longer, and generally found that aluminum repairs were going to be pretty eye-popping.
However, it should be noted that Edmunds didn't take the F-150 to a dealer certified by Ford to repair aluminum. Ford has gone to great lengths to train and prepare 750certified dealerships to repair aluminum body panels, so they probably would have a more competitive price tag for the repairs than the shop Edmunds went to.
Now, while I personally believe that common sense says a material like aluminum that is more difficult to work with -- a material that requires new tools and training -- will probably cost a little more in the short and medium term, what I wondered, and what Consumer Reportsrecently clarified, was what insurance companies charged for the previous generation F-150 with steel body panels compared to the 2015 aluminum bodied F-150.
According to Consumer Reports, "Consumer Reports' own analysis shows that the aluminum parts on the F-150 cost about the same as steel parts on last year's truck, and because the new F-150 is designed to make replacing panels easier, in many cases labor charges may be lower. ... Insurance companies seem to agree. Our research has also found that owners of the new aluminum truck aren't being charged more for collision insurance than [owners of] the outgoing model."
Ford's response? Time will tell, and likely sooner rather than later, how much more expensive real-world repairs on the aluminum F-150s will become. But recently, Ford, perhaps in response to the questioning of its F-150, announced that Barrick Gold USA had done some testing of its own.
Barrick Gold USA was one of three Ford customers chosen to blindly test prototype aluminum-bodied F-150s. The mining company drove two of the trucks through severe terrain at the Bald Mountain and Cortez mines in Nevada, and ultimately put more than 100,000 combined miles on the trucks.
"The F-150s see tough duty from operations supervisors, exploration field technicians, project managers, maintenance technicians and closure personnel," said Rebecca Caudill, Barrick Gold USA fleet manager, in a Ford press release. "Many of the trucks go into extremely rugged conditions during the planning and mapping out of new projects, core drilling and daily mining operations."
Ford went on to note that Barrick put its money where its mouth is and ordered 35 all-new F-150s after thoroughly testing them.
What it means to investorsSo why does any of this matter anyway?
Here's the thing: Ford's F-150 is a huge deal for the company, and many analysts have estimated the F-Series trucks generate well over half of Ford's global automotive profits. For Ford, as well as its investors and retail consumers, a problem with the F-150 or skyrocketing repair bills could certainly send sales lower and cause a large financial speed bump.
That's why Edmunds' report that, under certain circumstances, its bill for the aluminum bodied F-150 could have been 77% higher than its predecessor's made waves. And while Ford's testing the trucks with Barrick Gold USA doesn't refute specific billing questions raised by Edmunds, it does point out that if we all take a step back, these aluminum F-150 trucks are clearly still excellent products that can take a serious beating without crippling repair bills in the real world.
The bottom line is this: Sure, repairs of these aluminum trucks will probably be a little higher, but they will still be competitive. Until there is proof that insurance companies have widely and significantly increased the cost to insure an aluminum-bodied F-150 compared to a steel bodied F-150, I won't be concerned about sales declining because of higher repair costs. So far, Barrick's testing of the two trucks proves what most of us assumed all along: America's best-selling truck is still Ford tough.
The article Proof That Ford's 2015 F-150 Is Still Ford Tough originally appeared on Fool.com.
Daniel Miller owns shares of Ford. The Motley Fool recommends and owns shares of Ford. 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.
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