Ford Stock Slides as Fire Cripples Key Aluminum Supplier
A significant fire at a Novelis plant in New York threatens to disrupt production of the best-selling F-150 pickup for months.
Ford Motor Co. (F) shares tumbled 6.1% after a severe fire at a key supplier's aluminum plant in Oswego, New York, sparked fears of a prolonged production slowdown for the automaker's most profitable vehicle.
The blaze, which occurred at a plant run by Novelis, has halted operations at a facility responsible for a significant portion of the aluminum sheet used in the U.S. auto industry. The incident is expected to cause for several months, directly impacting the manufacturing of Ford's aluminum-intensive F-150 pickup truck.
Novelis's Oswego plant is a critical node in the automotive supply chain, with reports indicating it supplies nearly 40% of the aluminum sheet for the sector, and Ford is its largest customer. The fire reportedly caused extensive damage to the plant's hot mill, a crucial piece of equipment for producing the materials Ford relies on. until the first quarter of the next year, posing a serious challenge for Ford's production schedule heading into the new year.
In response to the crisis, Ford stated it has a dedicated team exploring all possible alternatives to mitigate the impact. "We are working closely with Novelis to understand the full extent of the issue," the company noted in a press release. Investors are watching closely, as the F-150 is a cornerstone of Ford's revenue and profitability.
The disruption threatens to tighten the U.S. aluminum supply, potentially leading to higher costs across the industry. While Novelis is exploring options to import materials from its overseas plants, could lead to increased expenses. Ford is expected to provide further details on the financial and operational implications of the supply chain disruption in its upcoming quarterly earnings report.