Steel industry is under stress from automakers' switch to aluminum

The transition to aluminum is gaining momentum. Automakers are under increasing pressure to meet stringent new fuel economy standards, with the result that use of lightweight aluminum is expected to double by 2025.

The carmakers' shift towards aluminum has raised concerns among steelmakers, who have previously fought hard to just keep their businesses running. Since Ford announced last month that it would make its new F-150 primarily from aluminum, steelmakers have been trying to respond to demand for lighter, stronger steels in an effort to retain one of their most important customers, the automakers.

The chief executive of Severstal North America, a subsidiary of Severstal Group Russia that currently owns Rouge Steel's operations, said: "I think we should all accept the fact that we are living in an era of new materials." As a result, Severstal sees no choice but to move towards advanced and lightweight high-strength steels.

For Severstal, such competition with aluminum would have been difficult to imagine 10 years ago. Rouge was the first in the world to participate in automotive integration with Ford.

"Henry Ford was a control freak, and he wanted to control the whole production, to the point of giving orders which cages to buy for a particular car model. He made steel, he made glass, he made tires," said a former Casey employee. When Japanese automakers visited Rouge after World War II, they copied everything they could. Today, the plant is once again a leader in innovation, and if Ford succeeds, the rest will follow, Casey said.