DEARBORN, Mich. — For nearly a century, Ford’s River Rouge factory and its neighboring steel mill have worked in close harmony to produce some of America’s most popular vehicles, from the Model A to the F-150 pickup truck.
But ever since Ford announced last month that it would make the body of its new F-150 mostly out of aluminum, that steel maker, which was spun off by Ford in 1989, has faced the unsettling prospect that its longtime partner is drifting away.
Carmakers’ shift to aluminum has raised apprehension among steel makers, which have been fighting an increasingly uphill battle simply to maintain their business. Now, they are trying to respond, making lighter, stronger steel in a bid to retain one of their most important customers, the automakers.
“The traditional view has been steel or nothing else,” said Saikat Dey, chief executive of Severstal North America, the United States subsidiary of Russia’s Severstal Group, which now owns the Rouge steel operations. “I think we all need to accept the reality that we live in a mixed-material world.”
Steel makers, which have been riding a wave of prosperity as the economy has recovered, have a lot to lose. Automakers account for about 20 percent of annual sales overall for American steel makers, the second most important source of revenue after the construction business, according to the Steel Marketing Development Institute.
For those companies with historic ties to the auto industry, the loss would be more acute. At Severstal’s Dearborn factory, for example, carmakers including Ford and others account for 70 percent of sales, the company said, though it declined to give specific figures for Ford.
The shift to aluminum is gaining momentum. Automakers are under increasing pressure to meet strict new fuel-economy standards by 2025, and their use of lighter aluminum is expected to double between 2008 and 2025, according to Ducker Worldwide, a research firm in Troy, Mich.
As a result, Severstal sees little choice but to move toward making advanced — and lighter — high-strength steel.
This year, it plans to make half a million tons more in its Dearborn facility than last year’s run of 2.1 million tons. Part of that demand will come from the F-150, whose frame has increased its use of high-strength steel from 23 percent to 77 percent, a change that will save up to 60 pounds, according to Ford.
“The F-150 is a big turning point,” said Andrew Lane, a metals analyst with Morningstar. “It’s a bold effort by Ford.”
Other steel makers are changing their ways, too. United States Steel has invested $400 million in a joint venture with Kobe Steel of Japan to make advanced high-strength steel in a Leipsic, Ohio, factory expected to produce 500,000 tons annually.
The consideration by carmakers of using more aluminum is actually opening up opportunities for producers of advanced steel, according to Jody Shaw, manager of automotive technical marketing at U.S. Steel.
“It’s those little changes that they’re willing to accept that’s creating an opportunity,” Mr. Shaw said.
Inside Severstal’s steel mill on a cold January day, hissing heavy machinery removed oxides from steel sheets, reducing their thickness to the equivalent of five human hairs.
“We’re sold as a raw commodity, but we’re built to specifications,” said Jim Mortensen, Severstal’s director of technical business development. “These are parts that are customized within one-hundredth of a millimeter.”
As steel becomes more advanced, Mr. Mortensen said, “the challenge is making it strong and retaining its formability.”
This batch of coils coming off the line is a high-strength, low-alloy blend that will most likely show up in the body structure of a Cadillac CTS sedan. At the coating factory next door, machines dip steel sheets to be used for body panels in molten zinc to protect them. These are headed for Mexico, to Navistar’s stamping plant there.
Steel makers argue that they still have advantages in price — aluminum can cost as much as three times more — and flexibility, both for the manufacturer and the mechanic who will be fixing the car.
“When you build a mass-produced vehicle, you really need to think about the consequences of the supply chain and repair and insurance costs,” Mr. Dey said.
But despite their confidence in some of their advantages, steel makers face an uncertain future, analysts say.
Automakers are scrambling to meet demanding new federal fuel-efficiency standards that will require a fleetwide average of 54.5 miles per gallon by 2025, a significant boost from the roughly 25 m.p.g. that vehicles average today.
When four major steel companies had quarterly earnings calls with analysts last month, “they all said as a constant refrain, ‘Steel remains the material of choice for now,’” Mr. Lane said.
“Looking out over the next five years, that could be a different story,” Mr. Lane said, adding, “Aluminum is so much lighter, there’s only so much the steel guys can do.”
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Until now, automakers largely have tried to meet the fuel-economy mandates with smaller cars as well as slow-selling hybrid and electric vehicles. The challenge lies in continuing to provide the larger, and more profitable, vehicles that buyers want.
Enter the new F-150.
“The heavier the truck, the more lightweighting can be achieved by the switch to aluminum,” Mr. Lane said.
This is a battle that has played out before, notably when Audi introduced its mainly aluminum R8 sedan in 2007. Aluminum is also used in smaller quantities by Land Rover, Mercedes, Mazda and Tesla. General Motors uses aluminum in the hoods of its pickup trucks and full-size sport utility vehicles, as well as for components of the Cadillac ATS and CTS and Chevrolet Corvette Stingray. The Detroit automaker said it planned to incorporate more lightweight materials in its next-generation pickup truck.
“Sometimes there is a push from the aluminum side, and they win over with a particular model, and steel tends to be the comeback kid, with more innovation,” said Felix Schuler, a Munich-based partner in the Boston Consulting Group’s metals and mining practice. Over all, he said, it’s a “healthy race.”
Ford said its new Mustang would have a hood, fenders and other components made of aluminum to reduce weight and improve fuel economy.
“Our approach with any material is that we treat each vehicle on a case-by-case basis, applying the right material at the right time to improve efficiency and performance,” said Said Deep, a Ford spokesman.
Even before the recent interest in aluminum, steel makers confronted a threat from the use of plastic in body panels. The ill-fated Pontiac Fiero in the 1980s, for example, had plastic body panels, which helped save on weight but were not strong or rigid enough.
What seems certain is that ordinary steel is likelier to lose out to its new and improved cousin than to aluminum, Mr. Schuler said. Advanced steel materials that are lighter, stronger and cheaper represent a middle ground between the metals.
“It could be in absolute terms one of the most winning materials,” Mr. Schuler said of the new steel.
But at the same time, demand from automakers for aluminum is soaring, expected to reach one billion pounds this year, up from 200 million in 2012, and to grow by more than 30 percent annually through 2020.
Aluminum companies are making expensive bets on this future, building plants and reconfiguring factories to meet anticipated demand. So far, these investments are paying off: They are selling out their automotive capacity as fast as they can build it, according to analysts.
Novelis is investing nearly $550 million to upgrade plants in Oswego, N.Y., and Nachterstedt, Germany, and to build a new factory in Changzhou, China, to triple its capacity from a year ago to 900,000 tons annually. It expects the auto industry to account for 25 percent of its business in two years, up from just 6 percent two years ago.
Alcoa, the country’s biggest aluminum producer, is investing about $670 million in its Iowa, Tennessee and Saudi Arabia facilities.
But all eyes will be on how well the F-150 is embraced and whether a pickup made out of aluminum will be rugged enough in the eyes of consumers. Ford sold 763,402 F-150 pickup trucks last year; it has not given a 2014 sales projection.
For Severstal, such competition from aluminum would have been hard to imagine, even 10 years ago. The River Rouge campus was the world’s first experiment in automotive integration, and it provided the roots of just-in-time manufacturing, said Robert Casey, the retired curator of transportation at the Henry Ford Museum in Dearborn.
“Henry Ford was a control freak, and he wanted to control as much of the manufacturing as possible,” Mr. Casey said. “He made the steel, he made the glass, he made the tires.”
When Japanese automakers visited after World War II, Mr. Casey said, “they copied a whole lot of what was going on at the Rouge.”
Today, the factory is once again a leader in innovation, but this time, it is to see whether aluminum proves a viable material for body panels, he said.
“If Ford makes this work,” he said, “you can see the rest of the industry following.”