Stelco to idle part of Hamilton plant, affecting up to 500 employees

HAMILTON — Stelco Holdings Inc. said on Monday it will indefinitely idle part of its Hamilton plant, a move it says is necessary for its survival and will impact up to 500 employees.

The company said it will idle its cold-rolled and coated operations at its Hamilton Works plant, with operations set to begin winding down on Oct. 9.

"This is an unfortunate but necessary action to help ensure the survival of Stelco in what has become a challenging and unsustainable market for cold-rolled and coated products caused by the ongoing and sustained trade disruptions impacting the Canadian steel industry," Stelco vice-president of sales Frederic Fafard stated in a memo obtained by CBC News.

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Ron Wells, president of United Steelworkers Local 1005, estimates 350 steelworkers will be laid off.

"Obviously, we got to meet with the company, and find out who's getting laid off, [and] make sure it's done by seniority," Wells told CBC News on Monday. "Christmas ain't that far away, and we have no idea the duration of these layoffs ... People are concerned. I don't blame them."

The company said the decision will not impact its ability to supply hot-rolled steel products.

In a statement, a Stelco spokesperson said the move comes "in the face of continued market uncertainty and prolonged injury to Stelco’s business resulting largely from steel imports into Canada."

The company said the indefinite idle is part of a plan to concentrate production at its Lake Erie facility in Nanticoke, Ont., and that a "significant" number of affected Hamilton employees will be offered jobs there.

Pat Persico, a spokesperson for parent company Cleveland-Cliffs Inc., said Stelco’s product mix will change but that the tonnage of steel production will not be affected.

Stelco cited U.S. tariffs and import competition as key pressures. U.S. President Donald Trump signed an executive order in June applying an up to 50 per cent tariff to certain steel and aluminum imports from Canada.

"Stelco’s market for cold-rolled and galvanized products has contracted significantly, while import penetration for these products remains at heightened levels," Fafard added in the memo.

"While the measures taken by the federal government in Canada have served to reduce imports into Canada overall, import volumes remain at levels that prevent Stelco from being able to bridge the gap in the market created by the trade crisis."

Ohio-based Cleveland-Cliffs acquired Hamilton-based Stelco in a $3.4-billion cash-and-stock deal that closed in November 2024.

"We're very disappointed," Wells said. "In particular, when Cliffs bought us in the fall of 2024, they made commitments. One of those commitments was to maintain the same number of unionized employees."

On Monday, Trump touted a new $15-billion US investment plan by Minnesota-based steelmaker Mesabi Metallics as evidence that American tariffs are working.

"I imposed powerful 50 per cent tariffs on all foreign steel, and now our steel industry is roaring back to life," Trump said at a press announcement. "Everyone is building their plant here because they don't want to pay tariffs. It's really not that complicated."

Kevon Stewart, director of United Steelworkers District 6, said his phone has been lighting up with calls from distressed Canadian workers.

"Everything is timing right now," he told CBC News. "This is not only a wake-up call, because the call for action has been there before. But we've got to come up with a game plan that ensures workers are protected if and when these measures are implemented."

He said such protections could include increased benefits, or removing the waiting time for benefits.

The company said it will continue to evaluate the status of its operations should conditions improve.

With files from CBC News and CityNews