One Hamilton steelmaker is laying off workers and another will shut down over Christmas, sending more than 5,000 workers home, as the global financial crisis continues to batter the steel industry.
U.S. Steel Canada is temporarily laying off 175 employees at its Hamilton plant as it extends the shutdown of its blast furnace.
And ArcelorMittal Dofasco will halt all steelmaking for two weeks at Christmas, taking the unprecedented step of asking all unessential workers to take vacation or unpaid leaves.
Steelmakers have been pummelled by the global economic slowdown and a steep slide in orders from key customers, including automakers.
“The volatility in this market is just unprecedented. I’ve never seen demand this bad,” said Larry Meyer, a spokesperson for ArcelorMittal Dofasco.
Laid-off workers at U.S. Steel Canada will not be called back until the Hamilton blast furnace — the heart of the plant’s steelmaking operations — is brought back to life following a shutdown that started late last month, said Rolf Gerstenberger, president of the United Steelworkers union at the plant.
Though tentative plans had called for the furnace to be restarted in mid-December, the shutdown is now expected to extend into the new year. The union was told to expect another 32 layoffs in the next two to three weeks, Gerstenberger said.
No layoffs have occurred at U.S. Steel Canada’s Lake Erie operation in Nanticoke, where the blast furnace has been shut down for a week for repairs, said Bill Ferguson, union president at the facility. The Lake Erie plant employs 1,200 people.
Officials at U.S. Steel Canada would only confirm plans to lay off 175 workers and would not comment on any future cuts or operational changes at its Hamilton or Lake Erie plants.
“We regret this action, but it is necessary to control our costs and maintain our competitiveness in this difficult environment until customer demand strengthens,” said U.S. Steel Canada spokesperson Trevor Harris.
“The dramatic downturn in the economy has negatively affected our overall business, and we have adjusted production across all of our operations to stay in line with customer demand.”
In addition to the staff reductions in Canada, Pittsburgh-based U.S. Steel is laying off 500 workers at facilities in the Pittsburgh area, northwest Indiana, Fairfield, Ala., Ecorse and River Rouge, Mich., and Granite City, Ill.
More than 5,000 hourly and salaried employees at the former Dofasco will be required to take vacation or unpaid leave during the 14-day shutdown, to begin Dec. 22.
Only essential staff will stay at the plant, which operates two blast furnaces and one electric arc furnace. The company plans to resume production at a reduced rate in January.
“It’s a cost-containment opportunity that will allow us to have our staff home with their families over Christmas and also save us some money,” Meyer said.
The downturn marks a sharp reversal of fortune for the steel sector. Driven by strong demand during the summer, both U.S. Steel and ArcelorMittal pumped out steel at record rates and saw profits soar in the second and third quarters. Workers at the former Stelco took home thousands of dollars in production bonuses.
But as the global economy slumps, demand for the steel used in cars and appliances has plummeted and customers are struggling to secure credit.
“Who’d have thought six months ago this would happen?” said Mike Doyle, an employee at U.S. Steel Canada.
With 10 years at the former Stelco, Doyle says he won’t be affected by the layoffs announced today.
“I won’t be hit this time but believe me, we all know how these kids feel, we’ve all been through it and we hate to see it happening to anyone else, especially near Christmas.”

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