Cleveland-Cliffs CEO aims to recall Stelco workers before Christmas

Explainer

The chief executive of Cleveland-Cliffs says he intends to recall all 175 workers laid off from Stelco's Ontario plants before the Christmas holiday. Lourenco Goncalves stated on Wednesday that this plan depends on Canadian customers increasing their purchases of domestically produced steel. He said the company is shifting its focus from seeking tighter import restrictions to boosting local sales in order to restore jobs. Goncalves also firmly rejected the possibility of selling the Canadian steelmaker for at least the next year, criticizing the federal industry minister for publicly discussing potential buyers.

"It will depend on Canadian customers buying Canadian steel, made by Stelco," Goncalves said. "If our plan works, my intention is to call back all the 175 workers before Christmas." The layoffs were announced in late September, with an internal letter initially warning that up to 500 positions at the Hamilton and Nanticoke, Ont., facilities could be affected. Ron Wells, president of United Steelworkers Local 1005, confirmed that 175 workers in Hamilton have been laid off, while no job cuts have yet occurred at the Lake Erie Works in Nanticoke.

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What is the dispute between Cleveland-Cliffs and the federal government?

Industry Minister Mélanie Joly has accused the U.S. steelmaker of violating the legally binding commitments it made under the Investment Canada Act when it purchased Stelco in 2024. She has warned that the company could face court action, financial penalties, or be forced to sell Stelco if it does not comply with its undertakings, which include maintaining certain employment levels. In response to Goncalves's recall proposal, Joly said the company must first present a concrete plan and timeline. "We need a real plan from them to show us they are working in good faith," she said. "The clock is ticking."

Goncalves dismissed the minister's actions, arguing that publicly soliciting buyers for a company the government does not own is counterproductive. "I do not believe that what Minister Joly is doing, when she openly solicits buyers for a company the government does not own, is a good course of action," he wrote. He stated he would not engage with any potential buyers for at least the next calendar year. Goncalves added that he would only consider a sale after Stelco demonstrates a year of higher production and after all laid-off workers have been brought back, and only if he decides to do so.

Why did Cleveland-Cliffs lay off workers at Stelco?

The company cited several factors for the job cuts, including U.S. tariffs, weak domestic demand for steel, and competition from cheaper imported products. Goncalves said the anticipated Canadian market for Stelco's cold-rolled and galvanized steel did not develop after the 2024 acquisition. He has blamed U.S. tariffs for making it impossible for Stelco to compete profitably in the American market. The union leader representing Hamilton workers accused the company of using the layoffs as a bargaining chip. "He just caused a lot of pain and grief for 175 people," said Ron Wells. "Obviously, we're against using our members as pawns."

Wells said the federal government is unlikely to yield to the company's pressure tactics. Ontario Economic Development Minister Vic Fedeli criticized Cleveland-Cliffs, calling the company disingenuous and noting its support for U.S. tariffs on Canadian steel. Liberal MP Lisa Hepfner accused the company of purchasing Stelco to weaken its Canadian operations and bolster its U.S. business. Goncalves has previously characterized the layoffs as temporary and said workers could be recalled if Ottawa negotiated a reduction of U.S. tariffs or further restricted steel imports.

What are the potential consequences for Cleveland-Cliffs?

Minister Joly has threatened legal action that could result in daily penalties of up to $10,000 or a forced divestiture of Stelco. Last week, she said she was aware of potential buyers interested in the company, though she declined to name them, citing confidentiality. Joly also said the government is consulting its lawyers about recent comments from Goncalves regarding his motives for the Stelco purchase. In a televised interview, Goncalves said he bought Stelco because it was flooding the U.S. market with steel and undercutting his own company's prices.

"I bought Stelco because I could not afford anymore having Stelco flooding the market here in the United States to the detriment of my own company," Goncalves told CBC News. Cleveland-Cliffs maintains it is in full compliance with its Investment Canada Act undertakings and expects to report that Stelco's employment numbers are above required minimums. The company has also rejected an offer of financial aid from Ottawa, arguing that new investment would not fix an unprofitable business model. The ongoing feud began after the layoff announcement prompted Prime Minister Mark Carney to say Cleveland-Cliffs had "betrayed" its workforce.

With files from The Canadian Press, BNN Bloomberg and The Globe and Mail