Novelis Inc., a major aluminum supplier to the automotive industry, is targeting late June to complete repairs at its fire-damaged Oswego, New York, rolling plant. The facility, which produces sheet aluminum for vehicle bodies, was impacted by two separate fires in September and November of 2025. While the company aims for a late second-quarter 2026 restart, customer Ford Motor Company has indicated a broader timeline, suggesting full operational capacity may not be achieved until sometime between May and September.
Financial Impact and Operational Disruption
The operational halt has delivered a significant blow to Novelis's financial performance. For its fiscal third quarter ending December 31, 2025, the company reported a net loss of $160 million. This was driven by an 11% year-over-year decline in total rolled product shipments to 809 kilotonnes, with the Oswego disruption directly responsible for a 72 kilotonne reduction. The fires also led to substantial one-time charges. Adjusted EBITDA fell 5% to $348 million, with the company attributing a $54 million pre-tax reduction to the plant outage.
Novelis has provided an initial repair cost estimate of at least $255 million. To bolster its financial position during the recovery, the company secured a $750 million equity injection from its primary shareholder in December 2025. As of the end of the quarter, Novelis reported total liquidity of $2.6 billion, with a net leverage ratio of 3.7x.
Supply Chain Strain for Automakers
The extended downtime at Oswego's hot mill continues to squeeze the automotive supply chain, particularly for Ford. The automaker relies on the plant for aluminum used in its flagship and high-margin F-150 pickup truck. Ford has warned investors that the slower-than-anticipated ramp-up is applying incremental pressure to production costs and the bottom line. The company is concurrently navigating other cost headwinds, including an estimated $2 billion impact from aluminum tariffs in 2026.
To mitigate the supply shortfall, Novelis stated it is "aggressively leveraging" its global network and external suppliers. CEO Steve Fisher emphasized that restoration work is progressing steadily. However, the company cautioned that once the hot mill is back online, operations will ramp up gradually over several months before reaching normal production volumes. This phased recovery implies that shipment limitations and the need for costly alternative sourcing arrangements could persist well into the second half of 2026.
Broader Market Context and Company Strategy
The incident at Oswego arrives as Novelis continues to invest in expanding its capacity, including a major new rolling and recycling facility in Bay Minette, Alabama. The company noted sustained strength in beverage packaging demand, which helps offset some of the automotive sector volatility. Nevertheless, the Oswego restart remains the critical near-term driver for the company's shipment volumes, cash flow, and its relationships with automotive OEMs.
For the broader market, the situation underscores the fragility of specialized industrial supply chains and the cost inflation that can result from unplanned outages. As Ford works to protect margins in the competitive U.S. pickup market, and Novelis manages a complex recovery, investors will be closely monitoring the adherence to the late-June repair timeline and the subsequent pace of the production ramp. Any further delays could prolong supply strain and elevate costs for both companies.
