Cleveland-Cliffs has reported that Stelco experienced its most robust third quarter since being acquired by the U.S. company in 2024. Despite this positive development, a significant number of employees at the steelmaker’s facilities in Hamilton and Nanticoke, Ontario, are facing imminent job losses as layoff notifications have been actively issued.
Lourenco Goncalves, CEO of Cleveland-Cliffs, highlighted the notable performance of Stelco during the third quarter, attributing it to the substantial improvement in the Canadian hot-rolled market. However, Goncalves emphasized the necessity for additional actions by the Canadian government to address the issue of oversupply in the galvanized steel market within Canada.
In response to challenges posed by U.S. tariffs impacting sales, Stelco Holdings Inc. announced plans to partially idle its Hamilton plant to secure the company’s future. The move is expected to result in approximately 333 layoffs in Hamilton and up to 50 at the Lake Erie Works in Nanticoke, as confirmed by Ron Wells, president of United Steelworkers Local 1005, and John McElroy, president of USW Local 8782.
During a recent earnings call, Goncalves expressed satisfaction with the growth in Cleveland-Cliffs’ major profit drivers. He commended the trade policies of U.S. President Donald Trump for fostering an environment conducive to investment and expansion in local communities, despite challenges such as tariffs affecting Stelco’s economic performance.
Goncalves underscored the importance of the Canadian government’s tariff-rate quota system in supporting the success of the hot-rolled steel business. He reiterated Stelco’s commitment to maintaining employment levels as agreed upon during the acquisition, emphasizing that the current layoffs are temporary pending resolution of trade negotiations between Canada and the U.S.
Looking ahead, Goncalves urged the Canadian government to restrict the influx of galvanized steel imports into the market, proposing that such action could lead to the reinstatement of temporarily laid-off workers at Stelco. Additionally, he expressed readiness to engage in legal battles to uphold the company’s decisions, including potential challenges from the Canadian government.
Meanwhile, discussions are ongoing between Ottawa and Cleveland-Cliffs regarding potential legal actions under Section 40 of the Investment Canada Act to address the situation. The government is considering various options, including imposing penalties, enforcing compliance with commitments, or mandating the divestiture of Canadian assets by the company.
In response to the unfolding events, union representatives have voiced concerns over the layoffs and perceived inconsistencies in messaging from Cleveland-Cliffs’ leadership. Workers express feelings of underappreciation amid the workforce reductions and emphasize the need for accountability in honoring commitments to employees and local communities.