| HAMILTON – The U.S. company that took over Stelco Inc. is shutting down its Hamilton and Lake Erie plants, putting 1,500 employees
out of work.
Operations will be closed over the next several weeks as Pittsburgh-based U.S. Steel consolidates production at its facilities in
Pittsburgh, Indiana and Alabama. Although the shutdowns are billed as temporary, the company gave no indication when the plants
would resume production.
Hamilton Mayor Fred Eisenberger said he was called by a U.S. Steel Canada representative who warned him of the impending
"I was stunned," he said, noting he has family working at the company, a connection many Hamiltonians have. "It's hitting pretty
close to home."
"It's devastating for the community," said Bill Ferguson, leader of the United Steelworkers local at the Lake Erie plant in
Nanticoke. "For the local people, this will be quite a blow. This plant, Lake Erie, has never shut down in its history."
U.S. Steel Canada, which bought Stelco for $1.9 billion in 2007, has already cut close to 700 of its 1,700 hourly workers in
Hamilton, where it shut down its blast furnace in November. The remaining operations at the plant, including its steel finishing
lines and coke ovens, will now be closed as well, said Rolf Gerstenberger, president of the United Steelworkers local at the plant.
All operations at Lake Erie Works, except for the coke ovens, will also close. "This is awful for Hamilton and it shouldn't be
allowed," Gerstenberger said. "Layoffs are not solutions. They only make things worse."
The company told provincial and federal officials the shutdowns are not protectionist moves triggered by "Buy American" provisions
in the U.S. government's economic stimulus package.
"The difficult decision to continue to temporarily consolidate our production, we believe, is a necessary response to current market
conditions," U.S. Steel CEO John Surma said in a late afternoon statement.
The steel industry has been hammered by one of the worst downturns in demand in decades. With the global economy in tatters, orders
from key buyers in the construction sector and the auto industry have flatlined.
There was more bad news yesterday from the car industry. Overall sales in Canada fell by almost 28 per cent in February compared to
the same month a year earlier.
General Motors of Canada Ltd. reported a staggering 56 per cent drop in sales. That monthly decline dislodged GM from its perch as
the No. 1 selling carmaker in Canada for the first time in almost six decades.
North American steelmakers are operating at less than 50 per cent capacity. U.S. raw steel production was 905,000 tonnes for the
week ended Feb 21, down from 2 million tonnes in the same period in 2008. No one believes this situation will reverse itself anytime
The shutdown news came on the same day the Bank of Canada dropped its overnight lending rate by a half-point to a record low 0.5 per
cent – its latest attempt to kickstart the struggling economy.
The steel industry shutdowns in Hamilton will put pressure on Finance Minister Dwight Duncan who told reporters yesterday the
province will rack up a combined deficit of at least $18 billion this fiscal year and next.
Hamilton Centre MPP Andrea Horwath, who is running for the NDP leadership this weekend, said the news shakes Hamilton's very
"Temporary or not, it's devastating news." She also lunged at the governing Liberals, arguing the government has not acted to
prevent such layoffs.
"Why do they have no plan to save our jobs?" she asked.
As orders dry up, steelmakers worldwide have been slashing production and laying off workers.
Union leaders at the former Stelco, who were notified of the company's plan at about 3 p.m. yesterday, say they have not been told
when the layoffs will take effect.
Unions will soon be holding meetings to inform members of the details of the shutdown.
Eisenberger said "the good news is this is not a shutdown. This is an idling. This is not the end of the steel industry in
Ontario Economic Development Minister Michael Bryant said "this is terrible news for Hamilton and the Nanticoke community."
"This is devastating news for their families and for all the people involved. I have spoken to officials at the company and asked
for and received an assurance that they will comply with the collective agreement requirements," said Bryant.
"Specifically I asked for and received an assurance that this is 100 per cent market driven. It has nothing to do with the stimulus
package in the United States that might involve potential steel industry protection in the United States," the minister said. "They
have exactly the same kind of idling taking place in Illinois and Michigan and Minnesota."
Bryant said the government will do all it can to get the mills working again.
"It is our hope that they will be back up at the kind of production they have been at in the past, and we want to explore every opportunity to see how we can make a contribution to get there."