Stelco proceeds with Hamilton layoffs despite Ottawa's legal threat
The steel company says the layoffs don't breach its investment commitments as the federal government offered financial support before the plant shutdown. About 350 workers are being laid off.
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Stelco Inc. says it will proceed with hundreds of layoffs at its Hamilton plant despite an ultimatum from Industry Minister Mélanie Joly, who threatened legal action last week if the company failed to present a plan to save up to 500 jobs.
In a letter to Joly, Paul Simon, Stelco's president and general counsel, argued that the layoffs do not breach the company's investment commitments. Those commitments, made when Ohio-based Cleveland Cliffs acquired Stelco in a $3.4-billion cash-and-stock deal, required the company to continue employing at least the same number of unionized and the vast majority of non-unionized workers as at the time of the transaction. Simon wrote that the commitments do not stipulate maintaining employment levels above a certain amount on each day of the five-year period.
Stelco cited U.S. President Donald Trump's 50 percent tariffs as the reason for the layoffs. The company wants Ottawa to impose further restrictions on imports of cold-rolled and coated steel products, limit import substitution, and eliminate remissions for steel products Canadian producers can supply.
The federal government said Stelco refused offers of financial support—including short-term bridge financing, longer-term loans, retrofitting and access to new markets—before announcing the plant shutdown. Stelco responded that the offers were not responsive to its core issues. Laid-off workers are being offered the opportunity to fill open positions at Stelco's Lake Erie plant.
Cleveland-Cliffs chairman and CEO Lourenco Goncalves said there is no market in Canada for the volume of galvanized steel the company produces domestically and that exports to the United States are essential. An anonymous source said Goncalves rejected the offers and expected a larger package, using language suggesting he wanted billions with no conditions attached. Goncalves disputed that characterization as "completely untruthful."
What is the total cost to the federal government of the financial support offers Stelco rejected?
Have any of the laid-off workers accepted transfers to the Lake Erie plant, and how many will relocate?
We'll update this story as answers emerge.
By the numbers
How many workers are being laid off at Stelco's Hamilton plant?
About 350 workers are being laid off at Stelco's Hamilton plant.
What was the value of Cleveland Cliffs' acquisition of Stelco?
Cleveland Cliffs acquired Stelco in a $3.4-billion cash-and-stock deal.
What tariff did the U.S. impose that Stelco cited as the reason for layoffs?
U.S. President Donald Trump imposed 50 percent tariffs, which Stelco cited as the reason for the layoffs.
