FORT LAUDERDALE, Fla. Aluminum has a big role to play in the automotive market, but high and volatile regional premiums are creating challenges for the industry, a General Motors Co. executive said.
"I have not heard a convincing explanation about why premiums went so high. For Gods sake, its like the premium is the base price and the price of aluminum is the premium," Saber Haidous, Detroit-based GMs global commodity manager of global purchasing and supply chain, said Jan. 14 at the Platts Aluminum Symposium in Fort Lauderdale, Fla.
The aluminum industry must work together to address such volatility. "If somebody has an efficient and visible approach, you are going to find us with the door open," he said.
But Haidous also faced criticism for what some attendees characterized as GMs over-reliance on the London Metal Exchanges North American special aluminum alloy contract despite wide spreads between Nasaac and A380 prices. He pushed back against suggestions that GM isnt working with its supply base on the problem.
"We are taking it on a case-by-case basis. ... We are listening," Haidous said, stressing that GM behaves differently than it did 10 to 15 years ago. "GM will not shut the door in your face ... we will continue to listen."
And while Dearborn, Mich.-based Ford Motor Co.s aluminum-bodied F-150 might represent a new era for the industry (amm.com, Jan. 13), market reaction is being observed closely by vehicle manufacturers and consumers, especially given the demands placed on pickup trucks, he said. "Everyone is going to be watching ... to see how it will perform."
Whether the aluminum industry will be able to meet expected increases in auto demand also remains a concern, Haidous said. "Everybody knows that aluminum sheet is on an upward trend and cars tomorrow will definitely be different than the ones today."
The question about volume isnt only about production capacity, but also high-value-added operations such as heat-treatment capacity, he said. "You can make aluminum as much as you want, but you need to make sure other operations ... are also out there."
The aluminum industry also must work together if the metal is to continue to make content gains in vehicles, Haidous said. "Dont get divided, otherwise steel will take over."
Nor should the industry become complacent, he said, noting the extensive use of ultra-high-strength steels, thin and strong, in GMs new Chevrolet Silverado and GMC Sierra pickup trucks. "There is a race among different materials ... and steel is not giving up the fight easily," he said.
And while aluminum has clear benefits in cutting weight and boosting fuel economy, the industry must be careful to contain costs, Haidous said. "We dont want expensive materials because this is going to be passed on to the consumer. ... and this is the last thing we want."