Dive Brief:
- Unexpected tariff costs and expenses related to a fire at a major supplier rocked Ford Motor Co.’s financial performance in 2025, according to the company’s Feb. 10 earnings call.
- The automaker ended up taking a roughly $2 billion hit from tariffs during the year, roughly doubling its projections from as recently as October, per President and CEO James Farley. The huge spike came from “an unexpected and late year change in tariff credits for auto parts,” Farley said.
- Ford also incurred a $2 billion headwind from supply disruptions caused by multiple fires at a facility owned by Novelis, which supplies aluminum to the automaker. Damage from one of the fires at the Oswego, New York, site has kept a key piece of equipment sidelined for months.
Dive Insight:
Ford is one of several major automakers that have felt the sting of the Trump administration’s tariffs on financial performance. For example, Toyota said this month that new U.S. tariffs were the primary culprit behind a negative impact of roughly $8 billion over the first nine months of fiscal 2026. Volvo and Subaru have also recently pointed to tariffs as a burden on their results.
The blow to Ford’s fortunes was exacerbated in Q4 due to confusion over the effective date for auto part tariff offsets for domestic manufacturers from the Trump administration.
“The short explanation is a credit that we have against our tariff liabilities on parts became effective on Nov. 1,” Chief Policy Officer and General Counsel Steven Croley said on the call. “And we had understood it would become effective instead on May 3.”
Even with the offsets now in place, Ford still expects to face a $1 billion impact from tariffs in 2026, according to CFO Sherry House.
Ford’s tariff struggles were compounded by aluminum supply issues from the Oswego plant fire.
Novelis confirmed this week that it expects its damaged hot mill, a key piece of equipment for aluminum production, will resume production by the end of Q2 2026. The rest of the facility has operated without disruption since November, including cold mill and heat treatment production, as well as automotive finishing and shipping.
As it awaits the return to full capacity at the Novelis plant, Ford said it has contingency plans to ensure aluminum supply. However, the disruption will continue to increase costs for the automaker.
“There will be tariffs and premium freight associated with that supply continuity of aluminum until we can get the Novelis hot mill back up and running sometime between May and September,” House said prior to Novelis sharing its expected restart date.
