Oswego, NY Third Alarm Burns Wall Street

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entropychaser

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On September 16th a fire struck the Novelis aluminum plant in Oswego, NY. This plant produces 40% of the aluminum sheet metal used in the US automotive industry. It is expected that the plant will be offline for repairs until next year. Replacement of aluminum sheet inventory will require overseas sources which are subject to import tariffs.

This problem impacts Toyota, Hyundai, Volkswagen ,and Stellantis. But the biggest impact is at Ford, specifically F-150; the top-selling vehicle in the US. I would imagine that Wall Street is paying close attention.

In 1980, light vehicles had 100 pounds of aluminum per car. Now it is up to 500 pounds.

 
Thursday morning November 20th Novelis had yet another fire in the same area that burned on September 16th. This also required a multi-alarm response. Ford Motor Company is the plant's biggest customer. Ford has already told investors that they will have a $2 billion decrease in fourth-quarter earnings and had previously planned a 50,000 unit increase in 2026 F-Series production. And now this. Sounds like they could use a fire protection engineer.
 
The Novelis aluminum plant in Oswego, as noted above, sustained serious fires on September 16 and November 20, 2025. Right now, repairs are expected to completed by late June. Direct damages are expected to cost at least $255 million. It is hoped that full production will be on line by September.

Novelis supplies 40% of aluminum sheet metal to the American automotive industry and the Oswego plant is their largest. They have twelve customers and Ford is their largest. These fires have disrupted production of the F-150 pickup- Ford's biggest source of profit. Ford has reported a $2 billion direct loss from the fire and has had to spent an additional $1 billion on high tariff imported aluminum.
 
The Novelis aluminum plant finally resumed production last week. FoMoCo must be so happy.

Novelis is based in Atlanta and is a subsidiary of Hindalco Industries in India. They presently have a new aluminum automotive sheet rolling mill under construction in Alabama. It is scheduled to begin production by the end of the year.

My guess:
The new plant will have state-of-the art fire protection.

In about five years, the plant in Oswego will be shut down and the employees will be offered jobs in Alabama. At first, they will be unhappy. That will all change when they realize that they are only hours from the beach and no longer have to shovel snow nine months of the year.
 
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