Major Factory Fire Hits US Auto Supply: What It Means for Ford F-150s
Huge NY aluminum factory fire stops 40% of US car metal supply until next year. Ford F-150 production is now at serious risk.
- A large late-night fire completely damaged a crucial section of the Novelis aluminum plant in Oswego, New York.
- The area that sustained the most damage was the hot mill, which is where the sheet aluminum used in the automotive industry is produced. This part of the plant is now unusable.
- The plant operator, Novelis, expects this major portion of the facility to be knocked offline until early next year.
- This disruption is serious because Novelis is a huge supplier, providing approximately 40% of the aluminum sheet used by the auto industry in the United States.
- Novelis supplies over 350,000 metric tons of sheet aluminum annually to the automotive sector.
- Ford Motor is the largest user of this plant. Analysts state that the fire presents a "serious question" for the production of the F-150 pickup, which is Ford’s top-selling vehicle and main profit generator. Ford will likely notify investors about potential implications later this month.
- In addition to Ford, about a dozen automakers receive aluminum from Novelis, including Toyota, Hyundai, Volkswagen, and Jeep maker Stellantis.
- Toyota confirmed they are working with other aluminum suppliers to lessen the impact, noting that their team has been "all over this". Hyundai said there is no immediate impact to their production.
- To address the shortage, Novelis is urgently utilizing its overseas rolling plants located in South Korea, Brazil, and Europe.
- However, this solution is complicated because imported aluminum is currently subject to a 50% U.S. tariff.
- Novelis is also partnering with industry competitors, such as Constellium and Arconic, to increase supply. Industry analysts warn, however, that these competing companies likely do not have much excess production available for automotive aluminum.