How Ford Can Lose Some Weight

Boeing's 787 Dreamliner got cleared by U.S. regulators recently and is ready to take to the skies. What does Ford (NYS: F) have to do with that? Well, the auto giant is looking at using the same material that's used in the 787 for its vehicles: carbon fiber.  

The 787 is the first large commercial plane that has ditched aluminum for carbon fiber. Ford has taken a liking to the material and has teamed up with chemical giant Dow Chemical (NYS: DOW) to develop ways to use lightweight carbon fiber in its vehicles in the next few years.

Why this sudden interest in shedding weight? Well, for starters, automakers are looking for ways to meet new fuel efficiency rules passed by the Obama administration. Secondly, carbon fiber might just make for better vehicle construction.


Carbon fiber + Dow = great strategy
President Obama announced the big goal for automakers last year: a performance standard of 54.5 miles per gallon by 2025. Ford's tie-up with Dow brings it a step closer to this goal. One of the ways for automakers to ramp up fuel efficiency is to make their vehicles lighter, and Ford is aiming to reduce its vehicles' weight by 750 pounds. Carbon fiber is a light yet sturdy material used widely in luxury and sports cars and in the aerospace industry. Automakers haven't been too keen on the material for mainstream vehicles because of its high cost. Ford wants to change that, and together with Dow it will develop cheap carbon fiber composites and manufacturing methods that can be applied economically.

According to the U.S. Department of Energy, carbon fiber has the potential to lower a vehicle's weight by nearly 50%. This could mean improving fuel efficiency by nearly 40%. Teaming up with a big brand name like Dow looks like a smart move. Dow is already expanding into the carbon fiber market, which is expected to become a huge one in the near future. Just last year it joined with the world's largest acrylic fiber maker, AKSA, to jointly manufacture and sell carbon fiber. Dow has also partnered with the U.S. Department of Energy's Oak Ridge National Laboratory.             

Others in the race
Ford isn't the first one to take a shot at lighter vehicles, though. In December of last year, rival General Motors (NYS: GM) announced it was setting up a carbon fiber joint venture with Japan's Teijin for mass production. Teijin is the world's second-largest carbon fiber manufacturer. Daimler and BMW are also getting ready to produce carbon fiber parts on a large scale in the next year or two.

The Foolish bottom line
Ford's investment in fuel efficiency technologies makes perfect sense, as they will clearly be needed down the line. And lighter vehicles aren't the only option Ford is weighing. Hybrids and electric vehicles are already a part of its plans. Want to learn more about Ford's bold moves? Simply click here and add Ford to your stock watchlist to stay updated.

Both Ford and GM are combining their "green" plans well with their emerging-market strategies. But they aren't the only companies finding growth in the world's fastest-growing markets. Motley Fool analysts have identified three big-name companies that are particularly well-positioned to profit, and you can learn more right now with our new free report: "3 American Companies Set to Dominate the World." It's completely free for Fool readers, but only for a limited time -- so grab your copy now.

At the time this article was published Neha Chamaria does not own shares of any of the companies mentioned in this article. The Motley Fool owns shares of Ford Motor. Motley Fool newsletter services have recommended buying shares of Ford Motor and General Motors. Motley Fool newsletter services have recommended creating a synthetic long position in Ford Motor. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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Michael

This author used the term "develop cheap carbon fiber composites".
This term has very negative connotations.
A more proper term would have been "less expensive carbon fiber composites".

April 16 2012 at 2:29 PM Report abuse +1 rate up rate down Reply