The financial picture at a major central New York employer continues to improve after two devastating fires.
"We are very pleased to start fiscal year 2027 with a strong first quarter," said Steve Fisher, President and CEO of Novelis, the worldwide aluminum products company with a big plant in the town of Scriba near Oswego. For the first time in many months, this quarterly conference call report to investors is mostly about business and less about fires.
The Oswego plant suffered two huge fires last fall that destroyed much of its hot mill, where high heat stretches ingots of aluminum into shapes that can be used to make soda cans, trucks and more.
The company moved quickly to rebuild and began importing aluminum and buying from competitors to keep serving as many customers as possible. Even so, Ford suffered an estimated $2 billion impact from the loss of sales of its popular F series trucks, for which Novelis made the aluminum for the truck bodies.
The Oswego hot mill went back online in June and has been ramping up since then.
"With operations back online and the supply chain normalizing, the majority of the anticipated costs related to the fires have already been incurred," said Fisher. "In addition, the plant is insured for property damage and business interruption losses related to such events, subject to deductibles and policy limits. We have received $300 million in insurance recoveries through the end of the first quarter."
Novelis estimates that the fire cost about one point seven billion dollars. When the insurance work is done, they estimate they will get back one point one billion in insurance reimbursements, leaving the final total cost of the fire to the company and shareholders at about 600 million dollars.
While Novelis did not lay off its Oswego workforce during the shutdown, several senior staffers at Novelis at the time of the fire were either fired or quit – the company won’t say – and official causes for the two fires have either never been determined or kept private.
But the company expects to be cash flow positive by the end of the fiscal year and Fisher is feeling optimistic.
"Overall, the most significant operational challenges from Oswego are behind us, and we are using this as an opportunity to strengthen our global operating standards even further. We are looking ahead with confidence. The team has responded exceptionally well," he said.
