Scriba, N.Y. – Fifteen years ago, Novelis Inc. made a decision that would turn its factory in the tiny Oswego County town of Scriba into a powerhouse in the automotive aluminum market.
It bet that expanding the plant, known for making aluminum for beverage cans, into a maker of aluminum sheet for automakers would pay off big.
It did. Novelis found so much business that it has invested close to $1 billion to expand the plant over the past 15 years, doubling its workforce to nearly 1,200 people during that time, estimates Austin Wheelock, executive director of the county’s economic development arm.
Novelis says it is the world’s largest supplier of aluminum sheets to the automotive industry, with a global market share of about 50%.
All of which means domestic automakers cannot afford any interruption in the supply of aluminum from Novelis. But that’s exactly what happened Sept. 16, when a fire tore through the ceiling of the Scriba plant’s hot mill.
The blaze burned for hours, lighting up the night sky in this town of 6,600 and breaking many vital links in the American auto industry supply chain.
Novelis had done its job so well that Ford Motor Co. and other car producers found they could not live without its aluminum. The fire temporarily shut down auto plants in Tennessee and Michigan. Ford estimates it cost the blue-chip company $1 billion.
Syracuse.com | The Post-Standard has put together the story of the rise of Novelis, the frantic fight to save the plant and the long-term plan to rebuild its surprisingly essential role in the U.S. auto industry.
‘An outstanding move’
Canadian-based Alcan Inc. opened the plant in 1963 off County Route 1A, four miles east of downtown Oswego.
Novelis spun off from Alcan in 2005 and was acquired in 2007 by Hindalco Industries Limited, the metals flagship of Aditya Birla Group, a $41 billion multinational conglomerate headquartered in Mumbai, India. Its North American headquarters are in Atlanta.
For much of its history, the plant -- which the company calls Novelis Oswego -- was known for making aluminum for the beverage can industry, and it still does. But the company’s decision to enter the automotive market was a game changer.
Aluminum, which is made from bauxite ore, is lighter than steel but strong and less prone than steel to corrosion. Plus, aluminum parts can be melted down and recycled without any loss in the metal’s properties when a vehicle is ready for the junkyard.
It was just the thing Ford Motor Co. was looking for.
Fifteen years ago, Ford and other automakers wanted to lighten their vehicles to meet tougher federal fuel mileage standards. Replacing steel with aluminum in body panels could save weight.
“The lighter the vehicle, the less energy it takes to push it and make it go,” said Wheelock, executive director of Operation Oswego County.
With companies like Ford looking to switch from steel to aluminum body parts, Novelis saw an opportunity to expand from the low-margin beverage can market to a higher volume and substantially more profitable business – automotive aluminum.
The company began investing heavily in the Scriba plant to make aluminum sheet for automakers, which can easily turn it into body panels like hoods, fenders and doors with stamping machines.
It started with a $200 million addition completed in 2013, the first of a series of investments that would make the plant the company’s premier maker of aluminum for U.S. automakers.
Before the expansions, the plant employed 500 to 600 people. It now employs about twice as many workers – 1,150 – at a factory that spans 1.7 million square feet. Along the way, the state of New York backed the plant’s expansion with $10 million in grants.
Ford became the plant’s biggest customer because it went big into aluminum body panels with its popular F-150 pickup trucks and large SUVs around the time Novelis decided to enter the automotive aluminum market.
Ford says it shaved 700 pounds off the F-150 — about 15% of the vehicle’s weight — by using aluminum instead of steel body panels. That means greater fuel economy for its gas models and greater range for the vehicle’s all-electric version, the F-150 Lightning.
Patrick Penfield, a professor of supply chain practice at Syracuse University, said Novelis’ decision to focus the plant on automotive aluminum was “brilliant.”
“Without a doubt, an outstanding move,” he said.
Quiet domination
Analysts say the Novelis plant in Scriba supplies about 40% of the aluminum used by automakers in the U.S.
“Oswego really is kind of their crown jewel for producing automotive sheet,” said Greg Wittbecker, an aluminum industry analyst with CRU Group’s Aluminum Market Update.
But few people outside of the aluminum industry knew just how big a role the Scriba plant plays in the automotive industry until the fire on Sept. 16 forced its shutdown and sent billion-dollar shock waves through the U.S. auto industry.
The Port of Oswego on the shore of Lake Ontario works closely with Novelis, storing up to 110,000 metric tons of aluminum ingots that Novelis imports through the port each year, mostly from Canada. When the plant is ready to heat and stretch the ingots into sheets, the port loads them onto trucks for shipment to Scriba.
Even port officials were surprised to learn how big a role the company plays in the automotive market.
“People were not aware,” said Thomas Schneider, the port’s interim executive director. “I didn’t until these things were brought to light after the fire.”
The fire tore through the ceiling of the plant’s hot mill. Firefighters from more than 20 departments poured 5 million gallons of water on the fire, but it still took four hours to extinguish.
Workers evacuated the building, and no one was hurt. But the fire heavily damaged the mill, where aluminum ingots are heated to start the process of turning the metal into sheets of aluminum. The cause of the fire is still under investigation.
Production at the mill remains shut down while crews race day and night to repair the damage. Novelis has even brought in stadium lights so the work does not slow down at night.
Novelis expects to bring the mill back online in December, which would be an impressive accomplishment if it succeeds. The plant’s workforce has already been brought back onto the job to help prepare the facility for a restart.
But Ford, the nation’s third-largest automaker and the Novelis plant’s biggest customer, said its production of F-Series trucks will shrink by 90,000 and 100,000 units in the fourth quarter, costing it between $1.5 billion and $2 billion in earnings, because of the interruption to its supply of aluminum.
The automaker expects to lop $1 billion off that loss early in 2026 by jacking up production once the supply of aluminum from Scriba resumes.
The impact of the fire has been so bad for Ford that the company has suspended production of its F-150 Lightning, the electric version of its popular pickup truck. Ford uses even more aluminum in the Lightning than it does in the gas-powered F-150.
And Ford isn’t the only automaker feeling the effects of the fire.
Nissan’s Vehicle Assembly Plant in Smyrna, Tennessee, halted production for two days because of the interruption in its supply of aluminum.
And Stellantis stopped production at its Warren Truck Assembly Plant in Michigan, where it makes the Jeep Wagoneer and Grand Wagoneer, for three weeks.
A lean aluminum industry
Still, Penfield said automakers’ heavy reliance on a single supplier is risky. Usually, manufacturers try to spread their purchases of key materials across at least two or three suppliers to protect against interruptions caused by weather events or, in rare cases, a fire, he said.
“It’s very risky,” he said. “I was surprised they sold so much to the auto industry. A single source is unusual.”
Ford has said it buys aluminum from other suppliers but has not said how much. And the fact that its production has been slowed so much by the fire indicates that it relies heavily on aluminum Novelis fabricates in Scriba.
One reason automakers like Ford rely so heavily on the facility is the aluminum industry in the U.S. operates at capacity. So automakers could not easily switch to other suppliers when the Scriba plant went down.
Wittbecker said aluminum companies in the U.S. learned from their experience making aluminum for the beverage can industry. They now avoid building more manufacturing capacity than is needed to meet demand.
“Historically, the market kind of operated on what I like to call sort of the ‘field of dreams’ business case, where they would build these mills and then they would go find the customers to fill them up,“ he said. ”That has historically led to not great financial returns for them."
When companies like Ford came along to say they were going to need a lot of aluminum, the aluminum industry was careful not to make the same mistake, he said.
While relying heavily on a single source for aluminum may seem risky, it has become more common among manufacturers, many of whom have copied Toyota’s just-in-time manufacturing practice. The system reduces inventory costs and decreases waste by receiving raw materials and parts only as they are needed for the production process.
It’s a strategy that worked perfectly until the Novelis fire showed what happens when that supply chain breaks, Wittbecker said.
“They’re assuming that this well-oiled machine is going to always work well,” he said. “When you get into situations like in Oswego, it does point out the risks of running lean manufacturing.”
Working day and night
Novelis, overall, is expanding its production capacity. It opened an aluminum finishing plant in Guthrie, Kentucky, in December 2020.
And the company is making a $4.1 billion investment in a fully integrated rolling and recycling plant in Bay Minette, Alabama, that is scheduled to open in 2027, according to regulatory filings. The new plant will make beverage packaging and automotive aluminum sheet.
The company says it expects strong demand from automakers to continue for the foreseeable future. It is projecting an annual growth rate of 6% between 2025 and 2030, driven by increased adoption of aluminum in conventionally powered and electric vehicles.
The forecast bodes well for the Scriba plant. In a part of Central New York where 1 in 6 people live in poverty, jobs at Novelis pay $40,000 to $119,000 a year, according to job listing data.
Among the open jobs listed on the company’s website last week was a mechanical technician position with a starting salary of $81,786 a year. It requires a two-year mechanical tech degree or five years’ experience.
The plant provides economic benefits to Oswego County that go beyond its nearly 1,200 steady jobs and the nearly $1.1 million a year it pays in school, town and county property taxes and payments-in-lieu-of-taxes.
Wheelock said the factory supports hundreds of transportation jobs, especially in the trucking industry, because of the need to move large volumes of material in and out of the massive factory daily.
In addition, it draws many contractors and customers to the Oswego area, boosting business for local hotels and restaurants, he said.
And while the interruption in the plant’s production has hurt Ford and other automakers financially, it might actually be giving the Oswego area a financial boost, Wheelock said.
Novelis has brought in hundreds of additional contractors to demolish the damaged portions of its hot mill and then to rebuild it, providing an extra dose of economic activity in the Oswego area, he said.
“I would say their economic impact temporarily is up from where it was before because of the construction on site,” he said.
“They are working day and night to get things 100 percent operational,” he added.
