Novelis restarted the hot mill at its Oswego, New York aluminum plant on Wednesday, nine months after two fires knocked the facility offline and triggered a supply crisis for U.S. automakers.
The Oswego facility is the largest domestic supplier of aluminum sheet for the U.S. auto industry, serving Ford, GM, Stellantis, and others
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Novelis restarted the hot mill at its Oswego, New York aluminum plant on Wednesday, nine months after two fires knocked the facility offline and triggered a supply crisis for U.S. automakers.
Among its customers are roughly a dozen automakers — Ford $F, General Motors $GM, Stellantis $STLA, and international manufacturers operating U.S. plants — making it the country's leading domestic source of automotive aluminum sheet, according to The Wall Street Journal. The thin aluminum sheets produced there are stamped into fenders, hoods, and other exterior vehicle parts.
The first blaze shut down the sheet-rolling line last September, and a follow-up fire two months later compounded the destruction, damaging both the machinery and the structure of the building itself. Novelis said it expects the Oswego plant to operate at less than full capacity in the coming weeks.
The outage hit Ford particularly hard. The automaker uses aluminum for the body of the F-150 pickup truck, America's best-selling vehicle for decades. Dealer lots saw truck supplies thin out ahead of the summer sales peak, and Ford has disclosed potential one-time costs of as much as $2 billion tied to the supply crunch, according to Reuters. On the company's April 29 first-quarter earnings call, Ford's top finance executive Sherry House told investors the situation with Novelis was unfolding in line with the automaker's expectations, according to Barron's.
To keep customers supplied while Oswego was offline, Novelis drew on production capacity at facilities in Europe and South Korea, the company said. Parent company Hindalco Industries of India put the financial toll of the disruptions at approximately $437 million for its most recent quarter.
"Restarting the Oswego hot mill is an important step forward for our operations and, most importantly, for our customers," Novelis president and CEO Steve Fisher said in a statement. "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."
Novelis said it is also accelerating the rollout of a standardized operating system at the facility. A new rolling mill the company is building in Alabama is expected to come online before the year is out, adding to Novelis's production footprint.
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