Welcome to the Daily 5 report for Wednesday, Oct. 8.
There is never a good time for a global automaker to lose a significant supplier of steel or aluminum parts. You can't build a car without them.
But Ford Motor Co.'s recent loss of its key U.S. supplier of aluminum — Novelis Inc.'s plant in Oswego, N.Y. — because of a plant fire clearly could not have come at a worse time. Ford made a strategic decision to build F-150 trucks in 2014 and later other vehicles with a significant portion of aluminum body parts. The objective was to lighten its vehicles for fuel efficiency.
But it was a complex decision fraught with risks. The Novelis fire underscores those risks.
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President Donald Trump's tariffs have roiled metals markets and made domestic supply more expensive.
In the case of aluminum, futures prices in October hit a three-year high of $2,750 per metric ton amid tight supplies and longer-term demands, according to commodity tracker Trading Economics.
In the days before the Trump tariffs, Ford could have sought replacement aluminum from Canadian or other foreign producers, but with tariffs and limited U.S. supplies, that's now a more costly option.
One Wall Street analyst today projected this aluminum problem would cost Ford about $1 billion, but we won't know for sure until the company reports third-quarter results this month. Shares in Ford slipped 6 percent yesterday on the news and fell another 1.5 percent today.
Ford has been tight-lipped about the potential financial impact.
"Novelis is one of several aluminum suppliers to Ford. Since the fire nearly three weeks ago, Ford has been working closely with Novelis, and a full team is dedicated to addressing the situation and exploring all possible alternatives to minimize any potential disruptions," the company said in an Oct. 6 statement.
Meanwhile, Stellantis CEO Antonio Filosa continues to tweak his top management team around the world, as Peter Sigal reported in this story.
Among the moves: Francesco Ciancia, a former Fiat Chrysler Automobiles executive who is now head of Mercedes-Benz vans, becomes global head of manufacturing. He succeeds Arnaud Deboeuf, who is leaving Stellantis, Sigal wrote for Automotive News Europe.
That's it for today. If you want to view this story in your browser, click here.
— Philip Nussel, online editor
