The Aluminum Association Inc. wants to test the steel industry's mettle in the automotive market.
Local steelmakers and industry analysts say the planned opening of an Aluminum Association office in Detroit means the competition between the two metals for automotive use will intensify.
'We've been going at 60 mph trying to make the case for stronger, lighter steel. I think the speed limit just went up,' said Carl Valdiserri, chairman of Dearborn, Mich.-based Rouge Industries Inc. Like the steel industry did years ago, aluminum manufacturers have set up a partnership with the automakers' design engineers. The Detroit office of the Aluminum Association, expected to open by year end, will have a staff to work directly with engineers, said J. Stephen Larkin, president of the Washington, D.C.-based Aluminum Association.
'Obviously, we would like to sell every pound of aluminum we could. One way to do that is to explain to our Tier 1 and automaker customers the potential benefits,' Larkin said.
The Aluminum Association announced the planned office Sept. 1, along with press releases touting aluminum's lower weight and recycled content.
It didn't take long for the steel industry to respond. Two weeks after the Aluminum Association's announcements, the American Iron and Steel Institute issued a press release touting steel's low cost and strength.
Two weeks ago, Valdiserri and two other steel CEOs - U.S. Steel Group's Paul Wilhelm and Bethlehem Steel's HankBarnette - began scheduling meetings with the CEOs of Ford Motor Co., General Motors and DaimlerChrysler.
'This is a big issue. The steel industry is just positioning itself to tell its side of the story,' said John Jacksy, regional manager of communications for Ecorse, Mich.-based Great Lakes Steel, a division of National Steel Corp.
What this means for steelmakers is more intense competition for sheet metal products, said David Cole, director of the Office for the Study of Automotive Transportation at the University of Michigan. Automakers already use aluminum for castings and engine blocks, and they are increasingly willing to use aluminum for hoods, decklids and other body panels. This trend threatens to dent steel's market share.
'It's going to be a very exciting competition,' Cole said. 'From the perspective of aluminum, they would like to sell as much fabricated product as possible, like sheet metal. The competition has intensified.'
That's why the aluminum industry is wise to set up a design partnership like the steel industry's, Cole said.
'The auto-steel partnership has been a terrific model. It allows you to tackle problems outside of the purchasing relationship,' he said. 'When you're buying and selling, that can make it difficult to get those things done.'