Cleveland-Cliffs has reported that Stelco’s performance in the third quarter of this year was the most robust since the acquisition by the U.S. company in 2024. Despite this positive news, a significant number of employees at the steelmaker in Ontario are facing layoffs in Hamilton and Nanticoke. The layoff process began earlier this month and is ongoing.
In a statement on Monday, Cleveland-Cliffs CEO Lourenco Goncalves highlighted the strength of Stelco’s third quarter performance since the acquisition, attributing it to the notable improvement in the Canadian hot-rolled market. Goncalves also emphasized the necessity for further actions by the Canadian government to address the oversaturated galvanized steel market in the country.
Stelco Holdings Inc. announced plans on Sept. 28 to idle a section of its Hamilton plant to ensure the company’s sustainability amidst challenges such as U.S. tariffs impacting its sales. Local union leaders disclosed that 333 layoffs are projected in Hamilton, with an additional 50 expected at the Lake Erie Works in Nanticoke.
During an earnings call, Goncalves expressed satisfaction with the growth of Cleveland-Cliffs’s major profit drivers. He commended the trade policies of U.S. President Donald Trump, stating that they are conducive to fostering investments in local communities and expanding domestic production, despite Stelco’s struggles due to tariffs.
Goncalves attributed the success of the hot-rolled steel business to the Canadian government’s tariff-rate quota system, which restricts the volume of imported products. He reiterated Stelco’s commitment to maintaining the agreed level of unionized and non-unionized employment following Cleveland-Cliffs’s acquisition.
The ongoing layoffs are portrayed as a temporary measure until a trade agreement is reached between Canada and the U.S. Goncalves urged the government to restrict or minimize the influx of galvanized steel imports into the Canadian market, suggesting that such action could prompt the rehiring of laid-off workers at Stelco.
In response to the situation, federal officials are exploring legal avenues under the Investment Canada Act, considering potential sanctions or orders to ensure Cleveland-Cliffs fulfills its commitments. Union representatives have criticized the CEO’s messaging as unclear and called for accountability in upholding employment agreements.