Cleveland-Cliffs has reported that Stelco had its most robust third quarter since being acquired by the U.S. company in 2024. Despite this growth, a significant number of employees at the steelmaker’s Ontario facilities in Hamilton and Nanticoke are facing imminent job cuts, with layoff notifications being issued over recent weeks.
CEO of Cleveland-Cliffs, Lourenco Goncalves, highlighted the positive performance of Stelco in the third quarter, noting significant improvements in the Canadian hot-rolled market. However, he emphasized the need for intervention from the Canadian government to address the oversupply of galvanized steel in the country.
Stelco Holdings Inc. announced plans on September 28 to idle a portion of its Hamilton plant to ensure the company’s sustainability amidst challenges posed by U.S. tariffs affecting its sales. The United Steelworkers Local 1005 president, Ron Wells, disclosed that around 333 layoffs are anticipated in Hamilton, while Local 8782 president John McElroy mentioned potential layoffs of up to 50 workers at the Lake Erie Works in Nanticoke.
During an earnings call, Goncalves expressed satisfaction with the growth of Cleveland-Cliffs’s major profit drivers and commended the trade policies under U.S. President Donald Trump for facilitating business investments and domestic production expansion. The imposition of tariffs, particularly on steel and aluminum imports from Canada, has created a favorable pricing environment for steel sales, according to Goncalves.
Goncalves attributed the success of the hot-rolled steel business to Canada’s tariff-rate quota system, which regulates imported product volumes. The government has emphasized the importance of honoring commitments made during Cleveland-Cliffs’s acquisition of Stelco, including maintaining employment levels. Goncalves reiterated that the layoffs are temporary measures awaiting a resolution in trade negotiations between Canada and the U.S.
The federal government is exploring legal actions against Cleveland-Cliffs under Section 40 of the Investment Canada Act, including potential penalties or asset sale requirements to enforce commitments made during the acquisition. The conflicting messaging from the CEO has raised concerns among union representatives, with calls for Minister Joly to enforce regulatory measures to ensure compliance.
Workers affected by the layoffs expressed feelings of undervaluation and confusion over the discrepancy between the reported profitability of Stelco and the ongoing operational adjustments. The union representative highlighted the need for consistency in messaging and urged for a fair resolution to safeguard the interests of the workforce.