Cleveland-Cliffs is standing firm on its decision to idle production and cut jobs at Stelco's Ontario operations, even as Canada's federal government accuses the Cleveland-based steelmaker of breaking the employment promises it made when it bought the company. The company says it plans to temporarily lay off as many as 500 workers across Stelco's Hamilton and Nanticoke plants while scaling back certain steel production at Stelco's Hamilton site, a move that has triggered a standoff with Industry Minister Mélanie Joly over commitments tied to the 2024 acquisition.
Cleveland-Cliffs again defended its decision to idle the Ontario plant in a letter to the Canadian government, according to Bloomberg, as reported by Crain's Cleveland Business. In a statement, the company said Stelco is in full compliance with each of its 34 undertakings tied to the deal, a set of commitments made under the Investment Canada Act when Cleveland-Cliffs bought the Canadian steel producer for $2.8 billion two years ago, per Manufacturing Dive.
Canada's federal government sees it differently. Ottawa says Cliffs is in breach of its undertaking to maintain at least the same number of unionized employees in Canada for five years, according to the Globe and Mail. Cleveland-Cliffs has not conceded the point, and the dispute now hinges on dueling readings of the same jobs pledge.
Projected Headcounts Versus Required Minimums
Cleveland-Cliffs' release lays out specific numbers meant to back up its compliance claim. The company expects Stelco's average annual unionized employment to come in at 1,879 full-time-equivalent workers, which it says is 113 above the required level of 1,766. It also projects salaried employment averaging at least 627 full-time-equivalent employees against a required floor of 603.
Those projections will get tested soon. The company's news release states that Stelco will update its compliance report once the current reporting period closes on October 31, as required under the Investment Canada Act.
A 15-Day Clock and a Request for a Meeting
The layoffs at the center of the fight were first announced on September 28, when Stelco said it would cut up to 500 jobs at its Hamilton and Nanticoke plants, according to the Globe and Mail. United Steelworkers representatives have said 333 of the layoffs were expected in Hamilton, with up to 50 more at the Lake Erie Works in Nanticoke, per CBC's report.
In response, Joly gave Cleveland-Cliffs a 15-day deadline to rehire workers or justify the layoffs, CBC reported. Cleveland-Cliffs, for its part, has asked to meet with Joly to discuss a path toward resuming full employment for the 175 Hamilton workers who have been temporarily laid off, a request detailed in the company's own release.
Tariffs and a Shrinking Steel Workforce
Cleveland-Cliffs has pointed to market pressures as a driver of the cuts. The company cited a 50 percent tariff rate on Canadian steel shipped into the United States as a source of difficulty, according to Recycling Today. CEO Lourenco Goncalves has also said Canada's domestic market for galvanized steel isn't big enough to support both Stelco and ArcelorMittal alongside what he called an avalanche of imports, Manufacturing Dive reported. The company's release separately flagged imports of non-automotive galvanized steel as a continuing problem for the Canadian market.
The cuts land against a backdrop of long-term decline in Canadian steel jobs. Direct employment in the country's primary steel manufacturing industry slipped from nearly 29,000 workers in 2003 to about 14,000 as of July, according to CBC.
Yet Goncalves has also pointed to stronger recent results at the Hamilton operation. He said Stelco's third quarter was its strongest since Cleveland-Cliffs acquired the company two years earlier, CBC reported, a detail that sits uneasily alongside the announced layoffs. Goncalves has additionally said Cleveland-Cliffs remains a strong advocate for the U.S. Section 232 tariff policy and believes a Fortress North America approach would serve both countries, according to the Globe and Mail.
