Ford Motor Company (NYSE: F) witnessed a decline in its stock price on Wednesday, even as a key supplier resumed operations. Shares dropped 3.2% to $14.47, reversing an earlier gain that pushed the stock to a session high of $15.24. The market's reaction underscores persistent investor concerns about the pace of recovery from recent supply disruptions.
Novelis Restart Fails to Lift Sentiment
Novelis announced that its hot mill in Oswego, New York, is back online after being shut down due to fire damage. The facility is a critical supplier of aluminum for Ford's F-Series pickup trucks, which use aluminum extensively in their bodies. Despite this positive development, investors remain skeptical about how quickly production can scale to meet demand.
"Restarting the Oswego hot mill is an important step forward for our operations and, most importantly, for our customers," said Steve Fisher, President and CEO of Novelis. However, the market's response suggests that the restart alone is insufficient to alleviate the challenges Ford faces.
Cost Pressures and Profit Outlook
Ford's 2026 financial guidance already incorporates a recovery from the Novelis disruption. The company expects a net $1 billion gain from the restart, but this is offset by $1.5 billion to $2 billion in temporary expenses, including tariffs and higher commodity prices. In its first-quarter filing, Ford warned of up to $2 billion in charges due to the aluminum bottleneck.
Ford maintained its full-year adjusted EBIT forecast of $8.5 billion to $10.5 billion and adjusted free cash flow guidance of $5 billion to $6 billion. However, the company noted that these projections exclude potential impacts from a prolonged Middle East conflict, a major U.S. economic slowdown, or further tariff changes.
Sales Data Raises Questions
Recent sales figures highlight the challenges ahead. Ford's U.S. vehicle sales dropped 13.6% in May compared to the same period last year. F-Series sales fell 13.3% in May and are down 15.1% year-to-date. As of the end of May, Ford reported 183,900 F-Series units in inventory.
The aluminum supply issues have also affected Ford's financial performance. In the first quarter, Ford Blue faced higher sourcing costs and tariffs, while Ford Pro experienced weaker Super Duty wholesales partially due to the aluminum problem.
Broader Market Impact
The Novelis restart did not provide a lift to the broader auto sector. General Motors (NYSE: GM) shares fell approximately 5.3%, while Stellantis (NYSE: STLA) shares dropped about 5.0% during the same period. This indicates that investors view the restart as a limited positive factor for the industry.
Novelis also supplies aluminum to General Motors and Stellantis, but Ford's reliance on the Oswego plant is more pronounced due to the F-Series' extensive use of aluminum. The company's guidance assumes a partial recovery of lost output in the second half of 2026.
Looking Ahead
While the restart of the Oswego plant is a step in the right direction, the real test will be whether Ford can ramp up production quickly enough to reduce costs and rebuild inventory. Investors will closely monitor monthly sales data and the company's next earnings report for signs of improvement. A slower-than-expected ramp-up, coupled with sticky aluminum prices and weak demand, could undermine the anticipated second-half rebound.
