Cleveland-Cliffs has reported that Stelco’s performance in the third quarter of this year was the most robust since the U.S. company acquired it in 2024. Despite this positive news, significant job losses are looming for hundreds of employees at the steelmaker’s facilities in Hamilton and Nanticoke, Ontario. Layoff notifications began circulating earlier in the month and are ongoing.
In a statement on Monday, Cleveland-Cliffs CEO Lourenco Goncalves highlighted the strength of Stelco’s third quarter, attributing it to a notable improvement in the Canadian hot-rolled market. However, Goncalves emphasized the necessity 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 idle a section of its Hamilton plant to safeguard the company’s viability amid challenges from U.S. tariffs impacting its sales. Local union leaders indicated that 333 layoffs are anticipated in Hamilton, with up to 50 more expected at the Nanticoke Lake Erie Works.
During an earnings call, Goncalves applauded the growth of Cleveland-Cliffs’s major profit drivers, crediting U.S. President Donald Trump’s trade policies for fostering conditions conducive to investments and domestic production. This positive outlook contrasts with Stelco’s struggles, which have been partly attributed to tariffs.
Goncalves underscored the significance of the Canadian government’s tariff-rate quota system in supporting the success of the hot-rolled steel business. He reiterated Stelco’s commitment to maintaining employment levels as stipulated in the acquisition agreement.
The federal government reiterated its expectations for Cleveland-Cliffs to fulfill its employment commitments and expressed concerns about the layoffs being a temporary measure until trade negotiations between Canada and the U.S. are resolved.
Efforts to seek government intervention to restrict the importation of galvanized steel into the Canadian market were emphasized as a potential solution to rehire temporarily laid-off workers. Goncalves also mentioned a willingness to sell Stelco and engage in legal battles with the Canadian government to uphold the layoff plan.
In response to the situation, Industry Minister Mélanie Joly hinted at possible legal actions under the Investment Canada Act, including financial penalties or asset sale requirements. The ongoing uncertainty has left workers feeling undervalued and raises questions regarding the company’s decision-making amid apparent profitability.
Union representatives criticized the perceived contradictions in Goncalves’s messaging, pointing out the disconnect between positive financial results and operational cutbacks. Calls for stricter enforcement of the Investment Canada Act reflect ongoing tensions and uncertainties surrounding the Stelco layoffs.