Following a fire at the Novelis factory that disrupted the production of various high-margin vehicles, Ford Motor Company has lowered its annual profit forecast. Novelis is one of Fords’ key suppliers, supplying aluminium for Ford’s F-150 pickup trucks. As a result, the carmaker has cost itself USD 1.5 billion to USD 2 billion without taxes and interest.
_0_0.jpg)
Image source: https://www.ford-trucks.com/
Explore- Most accurate data to drive business decisions with 50+ reports across the value chain
Ford said it anticipates recovering around USD 1 billion of those losses next year.
Chief Executive Jim Farley stated he had personally visited the site to coordinate recovery efforts. He added, “We have made significant progress in a short time to reduce the impact in 2025 and restore full output by 2026.”
Following this incident, Ford’s shares slipped about 3 per cent in after-hours trading as the company released its third-quarter results.
Revenue for the quarter rose 9 per cent year-on-year to USD 50.5 billion, with earnings per share of 45 cents, surpassing analyst expectations of 36 cents. Despite the positive results, Ford reduced its annual earnings forecast for the second time this year, revising its EBIT range to USD 6.0–6.5 billion, down from the earlier USD 6.5–7.5 billion.
Previously, the company had adjusted guidance due to tariffs, but some relief came after President Donald Trump approved a measure extending production credits for U.S.-built vehicles through 2030. This allows manufacturers to claim a credit equivalent to 3.75 per cent of the retail price, helping to offset the cost of imported components.
Don't miss out- Buyers are looking for your products on our B2B platform
Even so, Ford now faces a USD 1 billion net tariff burden despite the relief package. Chief Financial Officer Sherry House remarked that guidance would have been raised if not for the Novelis fire.
To mitigate losses, Ford intends to increase output of its F-150 and Super Duty trucks by 50,000 units at its Michigan and Kentucky plants next year. Production of the F-150 Lightning electric pickup, however, will be paused indefinitely to prioritise more profitable petrol-powered versions.
Novelis also supplies other carmakers such as Toyota and Stellantis, though General Motors confirmed this week that it has been “minimally affected” by the fire.
Sales of petrol-powered trucks and SUVs remain the primary profit drivers for Detroit’s automakers. Both Ford and GM have slowed their electric vehicle expansion plans to focus on these traditional bestsellers.
GM’s shares jumped 15 per cent earlier this week after strong third-quarter results and an optimistic outlook for 2026. Ford, meanwhile, continues to battle EV-related losses and quality issues. The company forecast losses of up to USD 5.5 billion in its EV and software segment this year and reported a USD 1.4 billion operating loss for the quarter in that division alone.
Must read: Key industry individuals share their thoughts on the hottest topics
Responses
