Cleveland-Cliffs reports that Stelco had its most robust performance in the third quarter of this year since being acquired by the U.S.-based company in 2024. However, despite this positive development, a significant number of employees at the steel manufacturer’s facilities in Hamilton and Nanticoke, Ontario, are facing imminent job losses. The CEO of Cleveland-Cliffs, Lourenco Goncalves, highlighted the strength of Stelco’s performance in the recent quarter, attributing it to the enhanced Canadian hot-rolled market. Goncalves also emphasized the need for governmental intervention to address the oversupply issue in the galvanized steel market in Canada.
Stelco Holdings Inc. announced plans to temporarily halt operations at part of its Hamilton plant to ensure the company’s sustainability amid challenges posed by U.S. tariffs impacting its sales. Union representatives indicated that approximately 333 layoffs are expected in Hamilton, with up to 50 more anticipated at the Lake Erie Works in Nanticoke.
During an earnings call, Goncalves commended the impact of U.S. trade policies on the company’s profitability while acknowledging the adverse effects of tariffs on Stelco’s financial performance. The steel sales have notably thrived under the current pricing environment, benefiting Cleveland-Cliffs.
Goncalves credited the success of the hot-rolled steel business to the Canadian government’s tariff-rate quota system, which regulates imported product quantities. However, the layoffs have raised concerns, with Goncalves assuring that they are temporary until a trade agreement between Canada and the U.S. is reached.
The federal government has held Cleveland-Cliffs accountable for maintaining employment levels as agreed upon during the Stelco acquisition. Industry Minister Mélanie Joly emphasized the importance of honoring commitments despite market challenges. Goncalves expressed readiness to engage in legal battles with the Canadian government to uphold the layoffs as a strategic move until trade negotiations progress.
Union representatives criticized the company’s actions, highlighting the sense of unreciprocated loyalty among employees facing layoffs. They expressed confusion over mixed messages from Goncalves, questioning the decision to shut down specific steel departments despite positive financial results. Additionally, concerns were raised about Cleveland-Cliffs’ role as a significant steel importer to Canada amidst advocating for reduced foreign imports.
Looking ahead, stakeholders are awaiting decisions from Minister Joly regarding potential legal actions under the Investment Canada Act to address the situation. The complexities surrounding the layoffs at Stelco amidst positive financial outcomes continue to fuel discussions and tensions within the steel industry.