Cleveland-Cliffs has reported that Stelco experienced its most robust performance in the third quarter of this year 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 cuts. The layoff process began earlier this month and is ongoing.
Lourenco Goncalves, CEO of Cleveland-Cliffs, highlighted the notable progress made by Stelco in the recent 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 overcapacity issue in the Canadian galvanized steel market.
Stelco Holdings Inc. announced its intention on September 28 to temporarily idle a section of its Hamilton plant to safeguard the company’s viability amid challenges posed by U.S. tariffs affecting its sales. Ron Wells, president of United Steelworkers Local 1005, disclosed that approximately 333 workers in Hamilton and up to 50 employees at the Lake Erie Works in Nanticoke are anticipated to be laid off.
During an earnings call, Goncalves expressed satisfaction with the overall performance of Cleveland-Cliffs, attributing the success to various profit-driving factors that have shown improvement. He commended the trade policies implemented by U.S. President Donald Trump, noting their positive impact on creating favorable conditions for companies like Cleveland-Cliffs to invest in communities and expand domestic production.
Goncalves highlighted that the current steel market is experiencing the most favorable pricing environment in three years, which he stated is essential for sustaining a thriving business that supports employment growth, fair compensation for workers, reinvestment in resources, and protection of critical supply chains and national security.
The CEO credited the success of the hot-rolled steel business to the Canadian government’s tariff-rate quota system, which regulates the volume of steel imports into the country. Goncalves reiterated Stelco’s stance that the layoffs are temporary measures pending a resolution in trade negotiations between Canada and the U.S.
In response to the challenging market conditions, Goncalves has urged the Canadian government to restrict or significantly reduce the inflow of galvanized steel imports into the Canadian market. He mentioned that Stelco could promptly rehire all temporarily laid-off employees if such measures were implemented. Additionally, Goncalves indicated a willingness to sell Stelco and expressed readiness to engage in legal battles with the Canadian government to uphold the layoff plan.
Federal Industry Minister Mélanie Joly emphasized that Cleveland-Cliffs is obligated to adhere to the commitments made during the acquisition of Stelco, including maintaining the employment levels of unionized and non-unionized workers. Joly warned that failure to comply with these commitments could lead to legal actions under Section 40 of the Investment Canada Act, potentially resulting in financial penalties or asset divestitures.
Amidst the uncertainty surrounding the layoffs, union representatives have criticized the messaging from Cleveland-Cliffs, describing it as perplexing. Workers have expressed feelings of being undervalued and unreciprocated for their dedication to the company. The union representatives have called for Minister Joly to uphold the enforcement of the Investment Canada Act to address the ongoing situation.