Cleveland-Cliffs CEO Lourenco Goncalves accused the Canadian government of bullying after Ottawa warned the company over layoffs at its Stelco plant in Hamilton.
Cleveland-Cliffs CEO Lourenco Goncalves has accused the Canadian federal government of "bullying and harassment" following warnings issued over layoffs at the Stelco steel plant in Hamilton, Ontario. The dispute centers on the U.S. company’s decision to shut down part of its Hamilton operation and cut up to 500 jobs, a move Goncalves describes as a "business decision to concentrate production."
Cleveland-Cliffs acquired Stelco in 2024. Last month, the company announced it would reduce operations at the Hamilton facility, citing U.S. tariffs imposed on Canada by the Trump administration. The federal government stated that Cleveland-Cliffs had made a pledge to protect jobs under the Investment Canada Act and that the layoffs break those commitments.
Industry Minister Melanie Joly said on Wednesday that "everything is on the table" regarding potential government responses. According to Joly, options include forced divestment of assets or financial penalties if Cleveland-Cliffs does not heed federal warnings to stop the cuts.
In an exclusive interview with BNN Bloomberg, Goncalves rejected the government's characterization of the layoffs. He stated that the job cuts are "temporary" and that he intends to rehire the affected workers. Goncalves emphasized the financial health of the subsidiary, saying, "Stelco is having a great year, we are making money, the Canadian market continues to react positively to things that we are doing."
Goncalves labeled Joly’s comments as "bullying and harassment." He compared the potential federal action to the nationalization of the steel industry by former Venezuelan president Hugo Chavez in 2008. "I don’t think that Canada is Venezuela, let alone Venezuela under Hugo Chavez," Goncalves said. He added, "We are not in Canada to lay off people, we believe in the workforce, we believe in the market, we believe that Canada is a country of laws."
The CEO stated that Cleveland-Cliffs is prepared to go to court to defend its position. He asserted that the company had not violated the deal made with former Industry Minister Francois-Philippe Champagne. Goncalves recalled that Champagne "rolled the red carpet for us" during the acquisition process.
Expressing concern about the broader implications for foreign investment, Goncalves said, "We did not expect less than two years after we acquired the company to be treated like a pariah." He concluded, "If that’s what Canada will do to attract foreign investment into Canada, I don’t believe that they will be very successful."
The conflict highlights tensions between foreign investment commitments and domestic economic policy in the face of international trade disputes. The outcome could set a precedent for how the Canadian government enforces the Investment Canada Act and may influence future foreign direct investment decisions in the country's industrial sector.
Sources
This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.
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