Cleveland-Cliffs has reported that Stelco experienced its most robust performance in the third quarter of this year since it was purchased by the U.S. company in 2024. However, despite this positive development, a significant number of employees at the steelmaker’s facilities in Ontario are facing imminent job losses in Hamilton and Nanticoke due to ongoing layoff notifications.
Lourenco Goncalves, CEO of Cleveland-Cliffs, highlighted the notable progress of Stelco in the recent quarter, attributing it to the significant improvements in the Canadian hot-rolled market. Goncalves emphasized the necessity for further actions by the Canadian government to address the issue of oversupply in the galvanized steel market within the country.
Stelco Holdings Inc. announced its intention on September 28 to temporarily idle a section of its Hamilton plant to safeguard the company’s sustainability amidst challenges posed by U.S. tariffs impacting its sales. Union representatives disclosed that approximately 333 workers in Hamilton and up to 50 employees at the Lake Erie Works in Nanticoke are expected to be affected by the layoffs.
During a recent earnings call, Goncalves expressed satisfaction with the increased performance of Cleveland-Cliffs’s major profit drivers, crediting the favorable trade policies under U.S. President Donald Trump’s administration for supporting investments in local communities and domestic production. Despite acknowledging the impact of tariffs on Stelco’s economic struggles, Goncalves hailed the current steel sales environment as the most favorable in the past three years.
Goncalves emphasized the positive outcomes of the Canadian government’s tariff-rate quota system on the success of the hot-rolled steel business, emphasizing the need for restrictions on imported galvanized steel to address market challenges. He reiterated Stelco’s commitment to its workforce, stating that the layoffs are temporary pending a resolution in trade negotiations between Canada and the U.S.
Recent developments have seen discussions between the federal government and Cleveland-Cliffs regarding the company’s obligations following its acquisition of Stelco, particularly concerning employee retention commitments. Minister of Industry Mélanie Joly emphasized that business decisions or market changes should not exempt companies from fulfilling their agreed-upon commitments.
Amidst escalating tensions, the possibility of legal actions under Section 40 of the Investment Canada Act against Cleveland-Cliffs is being explored by the Canadian government. Potential measures include financial penalties, legal enforcement of commitments, or divestment of Canadian assets by the company.
Union representatives expressed concerns over the layoffs and criticized the perceived inconsistency in messaging from Cleveland-Cliffs’ leadership. They called for accountability in upholding commitments and addressing the impact on workers affected by the layoffs. The union representatives also urged for adherence to regulatory requirements to safeguard the interests of the workforce.