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 news, a significant number of employees at Stelco’s facilities in Ontario are facing imminent job losses in Hamilton and Nanticoke. The layoff notices began circulating earlier this month and are ongoing.
Lourenco Goncalves, CEO of Cleveland-Cliffs, highlighted the strength of Stelco’s third quarter, attributing it to the notable improvement in the Canadian hot-rolled market. However, he emphasized the need for further action by the Canadian government to address the oversupply issue in the galvanized steel market.
Stelco Holdings Inc. announced plans on September 28 to temporarily idle a section of its Hamilton plant to secure the company’s viability amid challenges from U.S. tariffs affecting its sales. The United Steelworkers unions in Hamilton and Nanticoke, represented by Ron Wells and John McElroy respectively, disclosed expected layoff numbers of 333 and up to 50 employees.
During an earnings call, Goncalves expressed satisfaction with the growth of Cleveland-Cliffs’s major profit drivers under the current economic conditions. He commended the trade policies of U.S. President Donald Trump, which he believes are facilitating investments in local communities and bolstering domestic production.
Steel sales are experiencing a favorable pricing environment, with Goncalves noting that current prices are the most competitive in three years. He credited the success of the hot-rolled steel business to the Canadian government’s tariff-rate quota system, which regulates imported products.
Amid the layoffs, Goncalves reiterated that the job cuts are temporary until a trade agreement is reached between Canada and the U.S. He underscored the vulnerability of the Canadian market and urged government intervention to restrict galvanized steel imports to enable the rehiring of laid-off workers.
Furthermore, discussions around potential legal actions by the Canadian government against Cleveland-Cliffs have emerged, with considerations under the Investment Canada Act’s Section 40. Minister Mélanie Joly emphasized the government’s commitment to holding companies accountable for their obligations, hinting at penalties or asset sell-offs.
Union representatives have voiced concerns over the layoffs, expressing disappointment and confusion over the mixed messaging from Cleveland-Cliffs’s CEO. They are hopeful that Minister Joly will uphold her promise to enforce the Investment Canada Act, ensuring accountability in the business dealings affecting Canadian workers.