Fire at aluminum plant in NY now having a ripple effect on the auto industry
A massive fire at the Novelis plant in Oswego County, New York in September is now affecting the plant’s key customer, the auto industry. The Wall Street Journal reported that Novelis supplies at least 350,000 metric tons of sheet aluminum for auto production each year.
Unbiased. Straight Facts.TM
The September fire at the Novelis plant in upstate New York required more than 20 fire departments to put out and displaced roughly 1000 employees.
The part of the plant that sustained the most damage was the hot mill, which is where sheet aluminum is produced for vehicles. It is now a total loss and the plant itself is expected to be off-line until early 2026.
Auto companies that do business with Novelis
Ford is the plant’s largest customer with its top selling vehicle, the F-150, a main user of aluminum components. The motor company changed the F-150 exterior from steel to aluminum about ten years ago.
“This represents a serious question for the production of F-150 because that’s the aluminum that comes out of Oswego,” industry analyst Kaustubh Chandorkar told The Journal.
Ford says it is now exploring all options to reduce the disruption to production.
Other automakers, including Toyota, Hyundai, Volkswagen and Stellantis also buy aluminum from Novelis. Much like Ford, Toyota says it is also working to reduce the impact of the lack of supply by trying to find other suppliers. Stellantis says it is also attempting to limit the negative impact on operations. Meanwhile, Hyundai says there has been no impact on production at this point.
Other economic headwinds
The supply chain disruption comes at a time when the auto industry is facing other economic headwinds including a worldwide shortage of semiconductors and a reliance on China for rare-earth magnets. China is currently locked in a trade dispute with the Trump administration. A 90-day negotiating period between the two countries is set to expire in little more than a month, Nov. 10.
Back in April, President Donald Trump announced a 25% tariff on imported vehicles. Then in May, he expanded those tariffs by announcing a 25% levy on imported auto parts, such as engines and transmissions.
Novelis attempting to find alternative supplies
The Journal reports that carmakers are now reliant on just one or two parts suppliers due to the high cost of having multiple suppliers.
Novelis is now looking to some of its other plants overseas to help with the supply loss from the New York plant.
The company has plants in Europe, Brazil and South Korea. However in June, Trump imposed a 50% tariff on all aluminum coming into the U.S. from foreign countries.
”We are urgently taking steps to minimize the impact of the recent fire at our Oswego facility on our customers,” a Novelis spokesperson said in a statement to Straight Arrow News. “We have activated Novelis’ global network of plants and are also partnering with industry peers to source material in order to help mitigate the gap in supply.”
The post Fire at aluminum plant in NY now having a ripple effect on the auto industry appeared first on Straight Arrow News.
Ella Rae Greene, Editor In Chief
