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Ford's Top Aluminum Supplier to Restart Plant. What It Means for the Auto Maker. — Barrons.com
Ford's Top Aluminum Supplier to Restart Plant. What It Means for the Auto Maker. — Barrons.com
About this update from Stellantis N.v.
By Kit NortonFord Motor and the U.S. auto industry got a key aluminum plant back online Wednesday after a fire knocked the factory offline for the past nine months and led to a supply crunch for auto makers.Atlanta-based Novelis announced Wednesday that its aluminum-rolling plant in Oswego, N.Y., was again operational. The plant is the largest domestic supplier of aluminum sheet for the U.S. auto sector. Fires in September and in November forced the plant to go offline.Novelis' aluminum sheet is used for myriad vehicle parts by the likes of Ford, General Motors, Stellantis, and other automotive companies. Novelis also has customers in the aerospace industry as well as beverage can and specialties industries.Ford stock fell 2.57% to $14.57 on Wednesday. Shares of General Motors and Stellantis declined 4.3% and 4.1%, respectively. The S&P 500 declined 0.5%.Ford Chief Financial Officer Sherry House, during the company's first-quarter earnings call on April 29, said that its "Novelis recovery" was progressing as expected. Ford at the time forecast a $1.5 billion to $2 billion of one-time incremental costs to secure alternatively sourced aluminum "until the Novelis facility is operating at full throughput later this year."The price of aluminum has surged around 30% this year, including a 28% jump since the start of the U.S. war with Iran. President Donald Trump's 50% tariff on imported aluminum and the conflict in the Middle East have driven up the prices. The Middle East is a major producer of aluminum, meaning the Strait of Hormuz is integral to global aluminum shipments."Restarting the Oswego hot mill is an important step forward for our operations and, most importantly, for our customers," Novelis CEO Steve Fisher said in the media release."We are deeply grateful for the flexibility and partnership our customers have shown, as well as the extraordinary efforts of our employees, suppliers and industry peers who came together to support continuity of supply," Fisher added.With the hot mill now operational, Novelis said it was working closely with customers to ramp up supply.Novelis is a unit of India's Hindalco Industries. The company is currently looking to add aluminum production capacity with a new plant under construction in Alabama.Write to Kit Norton at [email protected] content was created by Barron's, which is operated by Dow Jones & Co. Bar...