A late-night fire last month that destroyed part of the Novelis aluminum plant in New York will have serious consequences for Ford Motor Co., and possibly other automakers, into early next year.
Novelis supplies close to half of the aluminum sheet used by U.S. carmakers, according to the Wall Street Journal, which cited industry analysts and was first to report the news.
Ford is the biggest user of the plant’s aluminum. It uses it in the body of its F-Series pickup to reduce vehicle weight, increase towing capacity, and cut down on corrosion compared with traditional steel bodies. Ford said it is working with Novelis and looking at options to mitigate any potential interruptions to production. General Motors and Stellantis are Novelis customers, too. Those companies said they are monitoring the situation.
A spokesperson for Novelis, which is based in Atlanta, confirmed to the Detroit Free Press that a crucial area in the company’s Oswego, New York, plant has been taken offline until early next year. Oswego is about 30 miles north of Syracuse, New York, located on the shores of Lake Ontario.
Ford is expected to experience some disruption to production of vehicles, two sources familiar with Ford’s manufacturing confirmed to the Free Press. But the sources could not characterize how deep the impact will be. The people asked to not be named because they are not authorized to share information with the public.
Ford spokesman Ian Thibodeau told the Detroit Free Press in an email: “Novelis is one of several aluminum suppliers to Ford. Since the fire nearly three weeks ago, Ford has been working closely with Novelis, and a full team is dedicated to addressing the situation and exploring all possible alternatives to minimize any potential disruptions.”
Thibodeau declined to comment further. Ford reports its third-quarter earnings on Oct. 23 and it is expected to share more information on the impact at that time. But according to a report in Seeking Alpha, a financial research platform, the impact could be costly. It said Wells Fargo Securities senior equity analyst Colin Langan studied Ford’s past production data and concluded that Ford could take an $800 million hit to its earnings before interest and taxes this year due to the production disruption of its most popular-selling vehicle.
“This assumes a 20% reduction in fourth quarter F-Series production — around 46,000 units — and reflects a high contribution margin on pickups of roughly $17,000 per truck,” the report states. “According to Langan, this would be a large hit to FY25 guidance of $6.5 billion to $7.5 billion. But on the plus side, pickup loyalty is high, Langan says, ‘so much of the impact will likely be recouped in FY26.’ ”
As for GM and Stellantis, both Novelis customers, the companies are monitoring whether there will be any impact to them.
Stellantis spokeswoman Jodi Tinson told the Detroit Free Press in an email: “Stellantis is closely monitoring the situation at Novelis. The company is taking the necessary actions to mitigate any potential impact on our ability to deliver vehicles to our customers.”
GM spokesman Kevin Kelly told the Free Press: “We are monitoring the situation, but do not expect any significant impact to our operations.”
Toyota spokesman Derrick Brown told the Free Press: “At this time, we do not anticipate any significant disruptions as our needs can be filled through alternate suppliers.”
Similarly, electric vehicle maker Rivian’s spokeswoman Kelli Felker said on Oct. 7, “We are aware of the incident, and we’re monitoring the situation very closely. At this point, we do not expect changes to our fourth-quarter production plans.”
Nissan spokesman Dominic Vizor told the Free Press on Oct. 8, “At this time, our production operations are running without interruption.”
Also on Oct. 8, Volkswagen spokesman Michael Lowder said, “Currently, there are no supply disruptions affecting the Volkswagen Group as a result of the fire at Novelis’ Oswego plant. As in all such cases, we remain in close contact with our suppliers and are continuously monitoring developments.”
According to Novelis spokeswoman Julie Groover, the fire broke out around 10 p.m. on Sept. 16. The damage was localized to the hot mill area of the plant. Groover said that area is the first step in the aluminum rolling process where Novelis turns ingots, the large blocks of solidified aluminum, into sheets of aluminum.
“We are in close contact with customers and are urgently taking steps to minimize the impact of the fire on them,” Groover said. “We have activated Novelis’ global network of plants and are also partnering with industry peers to source material in order to help mitigate the gap in supply.”
Groover said Novelis, which is owned by India’s Hindalco, is “working around the clock” to restore the hot mill and expects it will be back in operation by early first-quarter of next year.
Groover declined to provide a list of customers that use its aluminum, but according to its website, Novelis lists other automakers such as Hyundai Motor’s North America as a customer. Hyundai has not immediately replied to a request for comment.
(This story has been updated to include new information.)
Jamie L. LaReau is the senior autos writer who covers Ford Motor Co. for the Detroit Free Press. Contact Jamie at jlareau@freepress.com. Follow her on Twitter @jlareauan. To sign up for our autos newsletter. Become a subscriber
This article originally appeared on Detroit Free Press: Fire at an aluminum plant expected to hit Ford’s pickup production
Reporting by Jamie L. LaReau, Detroit Free Press / Detroit Free Press
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