A combination of supply chain disruptions, including an aluminum shortage and rising geopolitical tensions, is bringing US auto production to a standstill, impacting companies like Jeep and Ford. Contributing factors include tariffs, China’s restrictions on rare-earth minerals, and a fire at Novelis’ critical Oswego aluminum plant, reports The Wall Street Journal. Adding to the strain, a chip export ban involving Dutch firm Nexperia threatens to further destabilize global car manufacturing. With thousands of workers sidelined and vehicle prices remaining high, the auto industry now faces mounting economic and strategic pressures.
Novelis’ Oswego plant won’t resume hot mill aluminum production until early 2026 due to equipment damage, disrupting supply to major automakers like Ford, which uses the aluminum in its best-selling F-150. While Ford scrambles to find alternatives, GM and Toyota expect minimal impact. Novelis supplies 36% of the global automotive aluminum market, making this a significant but temporary setback, according to the Supply Chain Dive. Automakers may seek tariff exemptions or shift supplies between models to cope. Though costly, experts say this is a “spot issue”, disruptive but fixable, similar to past supply chain setbacks. They write:
Despite working “around the clock” to restore the hot mill, Novelis did not expect to restart operations for the equipment until “early Q1 of calendar year 2026,” the spokesperson said. Although the disruption will interrupt production at the Oswego plant, the rest of the facility remains open and operating.Ford accounted for most of the factory’s output, according to Stephanie Brinley, associate director of AutoIntelligence at S&P Global. […]
Meanwhile, General Motors and Toyota Motor did not expect Novelis’ troubles to impact their operations significantly. Toyota said it could meet its aluminum needs through alternative suppliers. […]
Disruptions to Novelis’ production could impact carmakers because the manufacturer accounts for 36% of the global market for aluminum to the auto industry, according to the company’s securities filing. […]
As an example of a disruption that was eventually corrected, Brinley pointed to a 2018 fire that damaged the Dearborn, Michigan, plant of Meridian Lightweight Technologies, a maker of automotive interiors. The blaze disrupted production of Ford’s best-selling F-150 pickup truck and forced the automaker to lay off several thousand workers temporarily.
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