Cleveland-Cliffs has reported that Stelco’s performance in the third quarter of this year was the “strongest” since it was acquired by the U.S.-based company in 2024. Despite this positive news, a significant number of employees at the steelmaker’s facilities in Hamilton and Nanticoke, Ontario, are facing layoffs. The company has begun issuing layoff notices, with the process ongoing.
Lourenco Goncalves, the CEO of Cleveland-Cliffs, stated on Monday that the Canadian hot-rolled market has shown substantial improvement, contributing to Stelco’s strong performance. However, he emphasized the need for additional action by the Canadian government to address the oversupply issue in the galvanized steel market.
Stelco Holdings Inc. announced plans on September 28 to idle a portion of its Hamilton plant to safeguard the company’s survival amidst challenges posed by U.S. tariffs impacting its sales. Local union leaders, Ron Wells and John McElroy, disclosed that layoffs affecting 333 employees in Hamilton and up to 50 workers at the Lake Erie Works in Nanticoke are anticipated.
During an earnings call, Goncalves highlighted the growth of Cleveland-Cliffs’s major profit drivers, attributing part of the success to the supportive trade policies of U.S. President Donald Trump. Despite the economic challenges faced by Stelco due to tariffs, Goncalves praised the current favorable steel pricing environment.
Goncalves commended the Canadian government’s tariff-rate quota system for hot-rolled steel, emphasizing its role in the business’s success. He reiterated that the layoffs are temporary until a trade agreement is reached between Canada and the U.S. Additionally, he expressed willingness to sell Stelco and engage in legal battles with the Canadian government to uphold the layoff plan.
Minister of Industry Mélanie Joly affirmed the government’s commitment to hold Cleveland-Cliffs accountable for its employment promises made during the Stelco acquisition. Legal actions under the Investment Canada Act, such as financial penalties or asset divestment orders, are being considered by the government.
Union representative Ron Wells criticized the messaging from CEO Goncalves as “confusing,” citing the contradiction between Stelco’s profitability and the decision to shut down certain steel departments. Wells also raised concerns about Cleveland-Cliffs advocating for reduced foreign imports while being a significant steel importer to Canada. He urged Minister Joly to enforce the Investment Canada Act as promised.
The situation continues to evolve as stakeholders navigate the complexities of the steel industry and trade relations between Canada and the U.S.
