Stelco Layoffs Loom as Trade Talks Continue: Cleveland-Cliffs CEO Optimistic

📅 6 days ago

Cleveland-Cliffs CEO Lourenco Goncalves indicates that hundreds of Stelco steelworkers may be recalled if a trade deal on steel is reached between Canada and the U.S., despite ongoing layoffs due to weak demand and import pressures.

In Hamilton, hundreds of steelworkers in southern Ontario are facing potential layoffs, but there is hope for their recall if a trade agreement on steel is finalized between Canada and the United States, according to Lourenco Goncalves, the chairman and CEO of Cleveland-Cliffs, the U.S.-based parent company of Stelco. Goncalves emphasized that the Canadian market is insufficient to sustain galvanized steel production from both Stelco and ArcelorMittal Dofasco, especially with the current levels of imports. He noted, "There’s not enough orders there for us. You can’t operate in an efficient and profitable way running at 50 or 55 percent capacity. That’s what we have been facing with galvanized steel."
Last week, Stelco announced it would lay off up to 500 workers at its facilities in Hamilton and Lake Erie, citing a persistent trade crisis, low demand, and the pressure of ongoing imports. The Hamilton Works is responsible for producing cold-rolled and galvanized steel, and both operations are set to be idled. Individual layoff notices began to be issued on Wednesday, with approximately 90 workers expected to receive notifications this week, as reported by Ron Wells, president of United Steelworkers local 1005, which represents workers at the Hamilton plant. The first wave of layoffs will take effect on Sunday, impacting an estimated 330 workers in Hamilton over the next three weeks, alongside additional cuts at the Lake Erie Works and among co-op workers.
Goncalves expressed optimism, stating, "It’s a temporary layoff. I do believe that one day we’re going to have a trade deal, I just don’t know when. Once this trade deal is reached and we’re back and able to produce and sell galvanized steel, we will bring back these people."
In a related development, Industry Minister Mélanie Joly sent a letter to Stelco’s president, Paul Simon, demanding a detailed plan on how Cleveland-Cliffs intends to honor the commitments made during its acquisition of Stelco in 2024. These commitments include maintaining a workforce of at least the same size for unionized and the majority of non-unionized employees for a period of five years. Joly dismissed the idea that U.S. tariffs and shifting market conditions would exempt the company from these obligations, highlighting that Goncalves has been a public supporter of the tariffs.
Goncalves responded to Joly's remarks, calling them "totally unfair" and accused her of "just playing with words." He praised the U.S. Section 232 tariffs as "the most successful policy implemented on trade in the United States ever," while also advocating for similar protections for the Canadian steel industry. He proposed a “Fortress North America” strategy designed to shield steelmakers in both countries from foreign competition while restoring U.S. market access for Canadian galvanized steel. "What would be the goal?" he asked. "To protect the Canadian steel industry the same way we’re protecting the American steel industry, and the consequences are all positive."
In response to Joly's letter, Goncalves stated that Cleveland-Cliffs would prepare two submissions by the Tuesday deadline: one addressing the demand for a plan to meet its commitments and a second, more detailed document containing sensitive commercial information protected under the Investment Canada Act. He did not disclose the specifics of either submission.
Meanwhile, at Stelco’s Lake Erie Works located in Nanticoke, Ontario, it was reported that 40 to 50 workers might be laid off as early as October 24 due to reductions in operations on the steel pickling lines. This facility processes steel from raw materials, including iron ore, and rolls it into coils for sale or for further processing in Hamilton. John McElroy, president of United Steelworkers Local 8782, emphasized that many of the affected workers are the primary earners for their families, expressing concern over job security. The union is collaborating with management to find alternative roles for affected employees typically filled by outside contractors.
Wells commented on the sentiments of the Hamilton workers, stating they feel "betrayed" and likening their situation to being "used as pawns" in the ongoing trade dispute between Canada and the United States. He described the situation as a "manufactured crisis," suggesting it is a strategy to gain the federal government’s attention for a more favorable trade agreement. In defense of the layoffs, Goncalves reiterated that this decision is a temporary measure aimed at preserving over 2,000 other jobs, stating, "I did not betray anyone. I’m temporarily laying off 350 and I’m still hopeful that we’re going to have a trade agreement and I can bring these 350 workers back and continue to grow."

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