Cleveland-Cliffs has reported that Stelco’s performance in the third quarter of this year was the most robust since the U.S. company acquired it in 2024. Meanwhile, a significant number of employees at the steelmaker in Ontario are facing job cuts in Hamilton and Nanticoke. Layoff notifications began earlier this month and are ongoing.
In a statement on Monday, Cleveland-Cliffs CEO Lourenco Goncalves highlighted that the third quarter was Stelco’s strongest since the acquisition due to substantial improvements in the Canadian hot-rolled market. However, Goncalves emphasized the need for additional actions by the Canadian government to address the oversupply issue in the galvanized steel market.
Stelco Holdings Inc. announced on September 28 its intention to idle a section of its Hamilton plant to safeguard the company’s survival amidst challenges posed by U.S. tariffs impacting its sales. United Steelworkers Local 1005 President Ron Wells disclosed that around 333 layoffs are anticipated in Hamilton, while USW Local 8782 President John McElroy mentioned up to 50 job cuts expected at the Lake Erie Works in Nanticoke.
During an earnings call, Goncalves expressed satisfaction with Cleveland-Cliffs’s major profit drivers’ performance, attributing the success to U.S. President Donald Trump’s trade policies. Despite Stelco attributing economic struggles to tariffs, Goncalves praised the policies for supporting investments in local communities and domestic production expansion.
Steel sales are currently thriving under what Goncalves described as the best pricing environment in three years, influenced by Trump’s executive order imposing tariffs on specific steel and aluminum imports from Canada. Goncalves credited the Canadian government’s tariff-rate quota system for contributing to the success of the hot-rolled steel business by limiting product imports.
Furthermore, Goncalves reiterated Stelco’s stance that the layoffs are temporary until a trade agreement is reached between Canada and the U.S. He emphasized the Canadian market’s vulnerability and urged the government to restrict galvanized steel imports to enable the recall of temporarily laid-off workers promptly.
In response, Federal Industry Minister Mélanie Joly emphasized that Cleveland-Cliffs’s acquisition of Stelco included commitments to maintain employment levels as per the 2024 figures. Joly underlined that business decisions or market changes should not impede fulfilling these commitments.
The ongoing situation has led to considerations of potential legal actions against Cleveland-Cliffs under Section 40 of the Investment Canada Act by the Canadian government. Options being assessed could include financial penalties, court orders for compliance with commitments, or asset divestitures.
Amidst these developments, union representatives have expressed concerns about the impact on workers, with President Ron Wells highlighting employees feeling undervalued during the layoff process. Wells also questioned the rationale behind the shutdown of certain steel departments despite Stelco’s reported profitability, emphasizing the need for consistent messaging and enforcement of regulatory frameworks.
The union remains hopeful that Minister Joly will uphold commitments to enforce the Investment Canada Act, as discussions continue regarding the future of Stelco and its workforce.