Ford Motor Co. announced on Thursday that it has reduced its profit expectations due to a fire at a crucial aluminum supplier, which will disrupt the production of several high-profit vehicles until the end of the year.
A fire at the Novelis facility in Oswego, New York, last month is projected to cost Ford between $1.5 billion and $2 billion before taxes and interest, with about $1 billion of that anticipated to be recovered next year.
CEO Jim Farley stated that Ford is collaborating with Novelis to secure aluminum from sections of the plant that remain operational. “We’ve made notable strides in a short time to lessen the impact for 2025 and aim to resume full production by 2026,” he mentioned.
After releasing its financial results post-market close, Ford’s stock increased by roughly 4% in after-hours trading.
Novelis revealed on Thursday that it intends to resume operations in the affected areas of the plant by the end of December, speeding up its previous timeline which anticipated a restart in early 2026.
Ford reported third-quarter sales of $50.5 billion, reflecting a 9% increase from last year. Earnings per share for this quarter came in at 45 cents, surpassing analysts’ expectations of 36 cents.
For the second time this year, the three major Detroit automakers have downgraded their full-year forecasts for earnings before interest and taxes from a range of $6.5 billion to $7.5 billion to a new range of $6 billion to $6.5 billion.
This previous adjustment was also due to tariffs affecting their operations.
President Trump recently approved an extension of credits for U.S. auto and engine production, allowing companies to claim credits worth 3.75% of the retail price of U.S. vehicles through 2030 to offset import tariffs on parts. “I want to acknowledge President Trump and his team,” Farley said during an analyst call.
Ford had estimated that Trump’s tariffs might cost it up to $3 billion this year, although it aims to mitigate that by $1 billion. Now, executives have indicated a net tariff impact of $1 billion due to the announced relief measures, and they expect a similar effect from the tariffs in 2026.
Ford’s Chief Financial Officer, Sherry House, mentioned that the company would have increased its guidance if not for the Novelis fire, clarifying that they source aluminum from other Novelis locations.
While Novelis also supplies other automakers like Toyota and Stellantis, Ford is significantly impacted as its F-150 trucks primarily use aluminum. General Motors indicated minimal impact from the incident.
Ford anticipates losing up to 100,000 vehicles by year’s end, but it plans to ramp up production of 50,000 F-150 and Super Duty trucks next year at factories in Michigan and Kentucky to recover some of the losses. They also announced the indefinite suspension of the F-150 Lightning EV truck to concentrate on the more lucrative gasoline version.
Moreover, the automotive sector faces various potential challenges to global supply chains. Recently, China has enforced tighter export controls on battery materials for electric cars and on rare earth elements critical for automotive production.
An ongoing intellectual property conflict between the Netherlands and China concerning computer chips has prompted warnings from industry groups about possible factory disruptions.
Meanwhile, sales of gasoline-powered trucks and SUVs remain strong, driving profits for Detroit automakers as Ford and GM pivot away from electric vehicle plans to focus on their traditional core offerings.
In the third quarter, electric vehicle sales surged as consumers rushed to take advantage of a $7,500 tax credit that expired at the end of September. Industry experts and executives foresee sluggish EV demand continuing until year-end, with a gradual recovery expected in 2026.
