Ford Faces Potential $1 Billion Loss Due to Supplier Fire

Ford could see its earnings decline by as much as $1 billion following a serious fire at a key supplier’s facility in New York last month. Analysts have indicated that the F-150 trucks will likely be most affected by this incident.

The fire occurred late at night on September 16 at Novelis’ aluminum plant in Oswego, New York, damaging significant portions of the facility and likely halting operations there until early 2026.

While Novelis supplies aluminum to various automakers, Ford is expected to experience the most significant impact because it’s the largest customer for the plant, primarily using aluminum for its F-150 truck bodies.

A Ford representative mentioned that they have been in close contact with Novelis since the fire about three weeks ago, emphasizing their commitment to finding solutions to minimize disruptions. The spokesperson noted that Novelis is one of several aluminum suppliers working with car manufacturers.

Furthermore, Ford plans to pause production next week at its Dearborn, Michigan facility, which manufactures the electric F-150, as per statements from union officials. It was also reported that metal supplies for the F-150—currently the best-selling vehicle in the U.S.—will be impacted through the end of this year.

Chris McNally from Evercore ISI commented that this primarily seems to be a Ford problem but warned of possible ripple effects affecting the broader industry. He anticipates that Ford’s revenue could take a hit between $500 million and $1 billion as a result.

Following these developments, Ford’s stock fell by 1.4% on Wednesday and has decreased by 4.7% over the past week.

This incident adds to a series of challenges faced by U.S. automakers, already grappling with rising expenses linked to auto, aluminum, and steel tariffs.

Novelis is known for producing over 350,000 tons of aluminum sheet yearly for a number of automakers, including Ford, Toyota, Hyundai, Volkswagen, and Stellantis. Meanwhile, the U.S. auto industry also has to contend with a global semiconductor shortage, interruptions caused by the pandemic, and ongoing union strikes.

The fire on September 16 led to a partial roof collapse at the Novelis plant, requiring the response of 26 fire departments, as reported by Oswego County Fire officials. About 175 firefighters were engaged, mostly using ladder trucks to manage the flames.

As of now, the cause of this fire remains under investigation.