A major fire at a key aluminum plant in upstate New York has dealt a significant blow to Ford Motor Company, with potential losses reaching up to $1 billion. The blaze, which started on September 16 at Novelis’s Oswego facility, has shut down a large part of the plant. This site is a crucial supplier for U.S. automakers, producing about 40 percent of the aluminum sheets used by companies like Ford, Toyota, Stellantis, Hyundai, and Volkswagen.
The fire damaged Novelis’s "hot mill," where molten metal is rolled into thin sheets for vehicles. This area may stay closed until early 2026, as investigators continue to search for the cause of the fire. For Ford, the timing is especially tough. The company relies heavily on this aluminum for its F-150 pickup trucks, which are highly profitable thanks to their lighter, aluminum-heavy bodies.
Since news of the disruption surfaced, Ford’s stock has dropped six to seven percent. The company said it is working closely with Novelis and looking at all options to prevent major interruptions. Analysts from Evercore ISI estimate that Ford’s earnings before interest and taxes could fall by $500 million to $1 billion, depending on how quickly they can secure alternative materials.
This incident has raised concerns about the risks tied to relying on just a few suppliers for critical parts. Even after supply chain troubles during the pandemic, many automakers still count on a handful of sources for important materials. Aluminum expert Kaustubh Chandorkar pointed out that while Ford has backup suppliers, ramping up other sources isn’t quick or cheap.
Novelis is trying to reduce the impact by working with partners abroad. However, importing aluminum is expensive due to a 50 percent tariff on U.S. imports. The company is taking urgent steps to ease the shortage but faces tough challenges.
Firefighters from 26 departments battled the blaze, which caused serious damage to the roof and forced crews to fight from ladder trucks because of the risk of collapse. The damage is expected to trigger major insurance claims, including for property damage and lost business. While Novelis has industrial property insurance, details about coverage remain undisclosed. Experts warn reinsurers could face huge costs if multiple manufacturers claim business interruption losses.
Other automakers, like Toyota, Stellantis, and Hyundai, say they are looking at alternative sources for aluminum and are monitoring the situation closely. Toyota’s spokeswoman said their supply chain team is actively managing the issue but cautioned that the situation is not fully resolved.
The fire is a reminder of how fragile supply chains can be when important materials come from a few places. For the auto industry, already dealing with rising costs and trade tensions, this disruption adds more uncertainty. Ford is set to provide more financial details in its upcoming earnings call on October 23, but investors have already cut more than $2 billion from the company’s market value.
This event highlights the challenge for manufacturers and insurers: balancing cost efficiency with the need for a more resilient supply network. Concentrated facilities like the Oswego plant help keep costs down but create big risks if something goes wrong. The fire that burned for hours shows how a single event can ripple through the industry for months to come.