Cleveland-Cliffs recently announced that Stelco’s performance in the third quarter of this year was the best since it was acquired by the U.S. company in 2024. Despite this success, significant job cuts are impending for hundreds of employees at the steel manufacturer’s facilities in Hamilton and Nanticoke, Ontario.
According to Cleveland-Cliffs CEO Lourenco Goncalves, Stelco saw notable improvements in the Canadian hot-rolled market during the third quarter, marking a substantial milestone since the acquisition. However, Goncalves emphasized the need for additional action by the Canadian government to address the oversupply issue in the galvanized steel market.
Stelco Holdings Inc. disclosed its plans on September 28 to temporarily halt operations at part of the Hamilton plant to safeguard the company’s viability amidst challenges posed by U.S. tariffs impacting its sales. Union officials reported that around 333 positions are expected to be affected in Hamilton, with an additional 50 layoffs projected at the Nanticoke-based Lake Erie Works.
During an earnings call, Goncalves highlighted the positive performance of Cleveland-Cliffs’s key revenue drivers and commended the trade policies of U.S. President Donald Trump for fostering an environment conducive to investments and local production growth. Despite citing tariffs as a contributing factor to economic pressures, Stelco has been navigating through the current market conditions.
Goncalves attributed the success in the hot-rolled steel sector to the Canadian government’s tariff-rate quota system, which governs the volume of imported products. The acquisition agreement between Cleveland-Cliffs and Stelco includes commitments to maintain the employment levels of unionized and non-unionized workers until 2029.
The ongoing layoffs are viewed as a temporary measure until a trade agreement is reached between Canada and the U.S. Goncalves stressed the urgency for government intervention to restrict the inflow of galvanized steel imports, indicating that Stelco could rehire the affected workers promptly under such circumstances.
Meanwhile, discussions have emerged regarding potential legal actions against Cleveland-Cliffs under the Investment Canada Act, with various options being contemplated by the federal government to ensure compliance with the commitments made during the acquisition. Union representatives expressed concerns over the job cuts and perceived discrepancies in the messaging from Stelco and Cleveland-Cliffs executives. They emphasized the need for accountability and adherence to regulatory frameworks to protect the interests of the affected workers.
