Ford Sees Up to $2 Billion Profit Hit From Aluminum Plant Fire
Impact Will Reduce Ford’s Production by About 100,000 Vehicles This Year, but It Largely Expects to Make Up Shortfall in 2026
[Stay on top of transportation news: .]
Ford Motor Co. expects a profit hit of as much as $2 billion after a devastating fire at a key supplier of aluminum for its top-selling F-150 pickup truck, overshadowing financial results that exceeded expectations.
The automaker now expects full-year adjusted earnings before interest and taxes of $6 billion to $6.5 billion, down from as much as $7.5 billion under itsprevious guidance, the company said as it announced third-quarter earnings Oct. 23. The low end of that new range represents a 41% drop from the$10.2 billionFord earned by that measure last year.
The announcement is Ford’s first detailed accounting of the damage it expects from a Sept. 16 fire at Novelis Inc.’s aluminum factory in Oswego, N.Y., that has disrupted a critical supplier to some of its most important vehicles. The Novelis plant is Ford’s top provider of aluminum for its highly profitableF-Series pickupsand large sport utility vehicles, the Expedition and Lincoln Navigator. The automaker has already reduced production of some of those models.
RELATED: Jeep Factory Stopped for 3 Weeks After Aluminum Plant Fire
The impact will reduce Ford’s production by about 100,000 vehicles this year, though the company expects to largely recover that shortfall next year, Ford CEO Jim Farley said.
“This is really a retiming of wholesale,” Farley said in a Bloomberg TV interview. “What we lose this year, we’ll gain most of it back next year.”
The comments provided relief to investors who sent the Ford’s shares up 3.3% at 4:31 p.m. in New York, erasing earlier declines after the results were released. The stock had gained about 25% this year through close Oct. 23, better than the broader S&P 500 Index.
Ford said the supplier interruption will reduce adjusted profit this year by $1.5 billion to $2 billion, though it expects to mitigate at least $1 billion of the impact in 2026, in part by boosting production of F-150 and Super Duty pickup trucks by 50,000 vehicles. Ford said it plans to hire 1,000 workers at factories in Michigan and Kentucky to support the increase.
Ford was on a path to earn more than $8 billion before interest and taxes this year prior to the fire, Chief Financial Officer Sherry House told reporters.
“We would have raised guidance if not for the Novelis fire,” House said.
The fallout cast a pall on third-quarter results that exceeded Wall Street expectations. Adjusted earnings in the period were 45 cents a share, topping the 36-cent average of analyst estimates compiled by Bloomberg. Sales hit a record $50.5 billion, better than the $43.7 billion analysts expected.
“The Ford team, including myself, have been on-site at the Novelis plant,” Farley said in the statement. “We are working intensively with Novelis and others to source aluminum.”
The focus on the fire comes as Ford is dealing with what it now estimates is a $1 billion financial penalty from President Donald Trump’s tariffs, down from an earlier estimate of a$2 billionnet impact.
House said the reduction is a result of Trump’s Oct. 17 proclamation that levied a 25% tariff on imported heavy trucks and prolonged to 2030 atariff discountthe president already provided carmakers that produce and sell completed automobiles in the U.S. Ford builds all its F-Series pickup trucks inU.S. factories.
“We will benefit from this,” House said of the latest tariff measures from Trump. “We’re expecting similar costs to this year, next year on tariffs.”
Strong sales of high margin sport utility vehicles, such as the Bronco and Expedition, along with solid sales of F-Series pickups, fueled the third-quarter earnings beat. Revenue grew 9%, while earnings before interest and taxes of $2.6 billion matched last year’s result, despite the additional tariff headwinds.
“It’s just the worst time to have an aluminum supply chain shock,” said David Whiston, an analyst with Morningstar Inc. “Ford’s momentum had been pretty good until news of that fire broke.”
Want more news? Listen to today's daily briefing belowor go here for more info:
