Canadian Steel Mills Re-Open With Controversy

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Ferrous Metals, Supply & Demand

Not 60 days ago did my colleague Stuart post a story entitled: Canadian Steel Hurting in Preference to US Plants when MetalMiner received 20 comments from (in some cases) outraged employees and others. At issue ” the closure of Canadian plants in deference to keeping US plants operating. Many comments from readers suggested that some of the closures made little sense strategically because the Lake Erie plant in particular had operated so profitably. Some had suggested it made more sense to shut down US plants instead.

And yet late yesterday afternoon, US Steel announced it would call back furloughed workers at its Hamilton, Ontario facility to resume output of coke. According to a Bloomberg article, 175 employees will go back to work now and 600 would come back this summer. In addition, a blast furnace in Illinois will bring back an additional 100 employees. Has demand increased enough to warrant the re-opening of these mills?

Many don’t think so and have offered up an alternative theory to the re-hiring. According to this article, workers say they’re glad for the callback, but some think employees are only returning so the company can avoid shelling out at least $15 million in severance pay. The article mentions an employee who had been with the plant for 30 years who would be returning to work after 17 previous layoffs.

Is demand up or is this a case of cost avoidance?

–Lisa Reisman

Comment (1)

  1. Anonymous says:

    The demand for Canadian orders is here. US Steel simply wants to keep them coming out of Gary works to have production maximized there. They are not allowing Canadians to make product for Canadian companies. I wonder why 800 employees are coming back when only the Coke ovens are restarting.
    Perhaps the plan is to actually resart Hamilton’s cold mill/gavanizing lines in August? If US Steel and Lake Erie come to a contract agreement by the July 31st expiry date that might make sense(no $6000 signing bonus that US workers received last year 🙁 ). Lake Erie could then be fired up and once again feed pickled steel to the Hamilton mill and ship out black steel for the pipeline industry.
    If US Steel Canada doesn’t restart soon they will lose far more employees than they think. I know of several employees who have found other jobs wth just a little less pay that say there is no way they will return to work for the steel company. If too many employees are lost, quality and costs may definitely become a problem.
    With a little luck, we will be reading about a complete restart of US Steel Canada in a month or so from now( more likely September). Orders are increasing and once both Chrysler and GM are operating their auto plants again the demand will pick up quite a bit in the US and Canada. This should be enough to bump the Canadian orders now made in the US back to Canada as well as getting another US Steel mill up and running.

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