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Analyst says Ford could lose up to $1bn due to fire at aluminum plant

According to Evercore ISI analyst's note published on Wednesday, a fire at an aluminum plant in New York that will affect Ford Motors' F-150 truck production for several months could cost the automaker up to $1 billion.

The company said that the fire at Novelis on September 16 will shut down a large part of its aluminum plant until the first quarter 2026. This will affect the supply of metal for Ford's most popular F-150 trucks up to the end of this year.

After the news of fire, Dearborn's automaker stock dropped about 6%.

Novelis is among the many aluminum suppliers that Ford has. Ford and Novelis have been working together closely since the fire three weeks ago. A team of Ford employees is dedicated to the problem and to exploring every possible alternative to minimize disruptions. The company refused to comment on Evercore's note. The automaker is facing a number of challenges, including high steel and aluminum costs, a rapidly changing trade environment and a battered supply base as a result of the COVID-19 pandemic strike and the 2023 union strike.

Analysts say that while other automakers may be affected, Ford will likely see the biggest fallout. Evercore's Chris McNally stated in the note that "we believe this is a Ford issue at this time, although we continue to check knock-on effect for Toyota as well." The note outlined an EBIT hit of $500 million to one billion dollars. Ford started using an aluminum-based body for its F-150 truck over a decade before in order to reduce vehicle weight.

The automaker will report its third-quarter earnings in the coming weeks. (Reporting and editing by Sharon Singleton: Nora Eckert)

(source: Reuters)