Ford is facing a fresh hurdle after a fire on September 16 at the Novelis aluminum plant in Oswego, New York. The automaker's supply chain has been severely disrupted and could lead to estimated losses of between $500 million and $1 billion USD, according to analysts at Evercore ISI.
Production suspended in Dearborn
A temporary halt in the production of the F-150 Lightning is planned for next week at the Rouge Electric Vehicle Center (REVC) in Dearborn, Michigan. That information came from an internal memo seen by Reuters and was confirmed by Nick Kottalis, president of the UAW local in Dearborn.
Ford has not specified the exact duration of the interruption or the mitigation measures being considered.
A key plant paralyzed until 2026
Production of the gas-engine F-150 could also be disrupted. According to Novelis, the majority of its Oswego plant will remain out of service until the first quarter of 2026, jeopardizing the supply of aluminum for F-150 trucks, a crucial model for Ford.
This dependence on a single supplier highlights the vulnerability of modern supply chains, which have already been shaken by the pandemic and the 2023 union strike.
Stock market and industrial repercussions
Following the news, Ford's stock fell by 6 percent on October 7, and then by an additional 1.4 percent the next day. Evercore estimates the impact will primarily affect Ford, although Stellantis and Toyota could experience minor collateral effects.
Ford in crisis mode
The automaker assures that it is working “closely with Novelis” and has deployed a dedicated team to find alternative solutions and reduce disruptions.
Since 2014, Ford has relied on an aluminum body for the F-150 to lighten the vehicle and improve its energy efficiency — a strategy that ironically now amplifies its vulnerability to this type of crisis.
Ford is set to publish its third-quarter results by the end of the month, and observers expect those to reflect the impact of the fire.