Cleveland-Cliffs has reported that Stelco experienced its most robust performance in the third quarter of this year since the company’s acquisition in 2024. Meanwhile, a significant number of employees at the steelmaker’s facilities in Ontario are facing job cuts in Hamilton and Nanticoke. Notifications of layoffs began earlier this month and are ongoing.
According to Cleveland-Cliffs CEO Lourenco Goncalves, the third quarter marked Stelco’s strongest performance since the acquisition, with notable improvements in the Canadian hot-rolled market. However, Goncalves emphasized the need for further action by the Canadian government to address the oversupply issue in the galvanized steel market.
Stelco Holdings Inc. announced on September 28 its intention to idle a section of the Hamilton plant to secure the company’s survival amidst challenges posed by U.S. tariffs affecting its sales. Reports indicate that 333 layoffs are anticipated in Hamilton, while up to 50 job cuts are expected at the Lake Erie Works in Nanticoke.
During an earnings call, Goncalves highlighted an increase in all major profit drivers for Cleveland-Cliffs. He commended the trade policies of U.S. President Donald Trump for creating favorable conditions for companies like theirs to invest in communities, expand domestic production, despite Stelco attributing its economic challenges to tariffs.
Goncalves credited the success of the hot-rolled steel business to the Canadian government’s tariff-rate quota system, which limits imported products. He reiterated Stelco’s commitment to maintaining employment levels as agreed upon during Cleveland-Cliffs’ acquisition, stressing that the layoffs are temporary pending a trade agreement between Canada and the U.S.
The federal government has emphasized the importance of honoring commitments made during the acquisition, ensuring continued employment for unionized and non-unionized workers. Industry Minister Mélanie Joly underscored that changes in market conditions should not excuse companies from fulfilling their obligations.
Despite the layoffs, Goncalves expressed readiness to reverse the decision once the government takes action to reduce the importation of galvanized steel. He indicated a willingness to sell Stelco and confront legal challenges to protect the layoff plan.
Minister Joly mentioned exploring legal avenues under the Investment Canada Act to address the situation, potentially involving financial penalties, court orders for compliance, or divestment of Canadian assets by Cleveland-Cliffs.
United Steelworkers representatives expressed concerns over the ongoing layoffs, citing employee dedication and loyalty not being reciprocated. They questioned the rationale behind the shutdown of certain steel departments despite Stelco’s reported profitability, urging Minister Joly to uphold regulatory measures.