Ford’s shares fell more than 7% early Tuesday after reports of a fire at one of its suppliers raised concerns that the company could face supply chain disruptions lasting several months.
Novelis, which supplies aluminum sheets to roughly 40% of the US auto industry, recently suffered a fire at its New York plant that damaged a key production area, threatening to disrupt output for several months.
According to a report from The Wall Street Journal, the fire caused the most damage to the building containing the plant’s hot mill, where aluminum sheets for the auto industry are produced.
The facility was destroyed and is not expected to resume full operations until early next year, according to the report.
To reduce the impact on US supply chains, Novelis is relying on its overseas factories in Europe, Brazil, and South Korea.
However, shipments from these locations are subject to the 50% US tariffs on imported aluminum, which have led several automakers to look for alternative suppliers.
The company supplies sheet aluminum to automakers such as Ford, Stellantis, Volkswagen, Toyota, and Hyundai in the US.
In a statement to the WSJ, Ford said that it has been working with Novelis while considering other suppliers to mitigate the impact on production.
“Since the fire nearly three weeks ago, Ford has been working closely with Novelis, and a full team is dedicated to addressing the situation and exploring all possible alternatives to minimize any potential disruptions,” the company said.
It is not clear whether these alternatives could fully cover the supply chain damage.
Ford’s best-selling vehicle in the U.S., the F-150 pickup truck, depends heavily on aluminum parts, making it particularly vulnerable to this disruption.
The model switched from steel to aluminum exteriors about a decade ago.
According to sources familiar with the matter, the fire’s impact may be addressed by the company in the upcoming quarterly earnings call on October 23.
In the first quarter’s earnings call in May, the legacy automaker suspended its 2025 guidance, citing the uncertainty of the US tariffs’ impact.
Earlier this week, Jefferies said it expects Ford “will refrain from providing 2026 guidance until next year.”
The analyst Philippe Houchois raised the firm’s price target on the company to $12.
As of press time, Ford is trading at $11.78, a 7.3% drop from Monday’s closing price of $12.70.
