Cleveland-Cliffs to Retain Stelco Amid Jobs Dispute With Canadian Government — Update

By Robb M. Stewart and Paul Vieira

OTTAWA--Cleveland-Cliffs is ruling out selling Stelco until the business improves production and 175 laid-off workers return to their jobs, an effort Chief Executive Lourenco Goncalves said hinges on Canadians buying the company's steel products.

The workers who have been laid off at operations in Ontario could be back on the job before Christmas if the actions work, Goncalves said.

The comments come amid an escalating war of words between Goncalves and Melanie Joly, Canada's industry minister, who has been critical of the layoffs and accused Cliffs of breaching undertakings around jobs and advocacy for trade policy made to secure approval for its roughly $2.4 billion acquisition of Stelco in 2024. Joly last week gave Cliffs 15 days to act or risk fines and even a possible forced sale of Stelco.

In a letter Thursday to Stelco President Paul Simon, Joly demanded Cliffs immediately recall all workers at Stelco as a condition to a meeting proposed by Simon with himself and Goncalves. Joly said she expects the steelmaker and its parent company to provide a "clear and credible plan for the re-engagment of those workers."

The minister has said a legal process has began to protect the jobs. She last week said the federal government was aware of some potential buyers for the Canadian assets of Stelco, but declined to offer names.

"Stelco is not for sale and 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. In countries other than Canada, that would be illegal," Goncalves said in an email to The Wall Street Journal.

The chairman and CEO of Cliffs said he also didn't believe that the government "engaging with the union to jointly attack in the media both the parent company and its CEO is constructive to attract foreigners to invest in Canada."

Goncalves said he wouldn't talk to any suitors for Stelco "real or imaginary" now or within one calendar year. "Conversely, after we demonstrate one year of higher production numbers, and also have brought all the 175 workers back to their jobs, I will be glad to sell the company, and only if I decide to do so by then," he said.

Cliffs has blamed weak demand for galvanized steel and Canadian imports of foreign steel it said have flooded the market for forcing it to lay off workers at Stelco and idling cold-rolled and coated steel operations in Hamilton, Ontario, so that it can concentrate on hot-roll products.

Early this week, Cliffs delivered a letter to Ottawa stating an exhaustive review confirmed Stelco was in full compliance with each of the 34 undertakings agreed to with the takeover and that it expected to close the reporting period having exceeded commitments on overall unionized and salaried worker numbers.

Joly in her letter said Cliffs interim compliance report wasn't satisfactory and that it needed to address directly her demands with underlying data, documents and evidence to substantiate what she described as assertions.

"The mistake here would be Cleveland-Cliffs not respecting the obligations, the commitments that they made in the acquisition," Prime Minister Mark Carney said. "That's enough. [There is] a legal process underway."

Goncalves said that before the acquisition Stelco was flooding the U.S. hot-rolled steel market with Canadian rolled products at prices well below what his company was charging. Cliffs bought business, Goncalves said, because he believed in its cost structure and that prices could be increased while at the same time still selling the same tonnage to the same U.S. buyers.

With cold-rolled steel, where Stelco isn't a significant supplier to the automotive industry or into the U.S., he said the plan was different. "We believed that we could sell cold rolled and galvanized steel within the Canadian domestic market, and that part did not materialize and has not improved yet," he said.

Goncalves said that since the Canadian government won't block imports of cold-rolled and galvanized steel, Stelco would rely only on self-help and Canadian customers. "Going forward, it will depend exclusively on Canadian customers buying Canadian steel, made by Stelco."

Write to Robb M. Stewart at robb.stewart@wsj.com and Paul Vieira at paul.vieira@wsj.com

(END) Dow Jones Newswires

October 29, 2026 14:19 ET (18:19 GMT)