U.S. Steel shutdown topic of discussion at Queen’s Park

(Update)

The news that U.S. Steel won’t re-start its blast furnace in Hamilton ever again dominated political debate in Ontario Wednesday. Lisa Hepfner has the latest.

Tory Economic Development critic Jane McKenna brought it up at Queen’s Park first thing in the morning. McKenna asked the government whether it still thinks the job crisis in manufacturing is a myth. NDP Leader and Hamilton native Andrea Horwath said it’s the Mayor’s worst fear come true and that the government is just giving up. Put on the defensive was Economic Development Minister Eric Hoskins who said ‘the jobs are still there at U.S. Steel, the plant is still making coke and finishing and rolling steel, and that the province is proud of Hamilton for becoming such a hotbed of investment.’

Then in the afternoon, Hamilton NDP MP David Christopherson brought the issue up in the House of Commons in Ottawa: “For over 100 years, Stelco made steel in Hamilton, providing good high paying jobs. But when Stelco ran into trouble, it was sold off to U.S. Steel on a solemn promise to maintain jobs and investment in my hometown of Hamilton. This Conservative government then rubber-stamped that U.S. Steel takeover. If it wasn’t obvious before, it’s certainly obvious now; U.S. Steel has broken that promise and we want to know what U.S. Steel is going to do about it?”

James Moore is the Federal Industry Minister: “It’s factually not true Mr. Speaker. Production is going to continue. This company U.S. Steel has had a drop of 11%. On Monday, they announced a loss of almost $1.8 billion. That’s not something the government can yell and scream and correct. Mr. Speaker these are difficulties in the private sector. However, U.S. Steel in Canada, one of the things they manufacture in Canada is steel used in pipleines. The NDP comes before the house and they say no pipelines to British Columbia, no Keystone XL pipelines and then they come before the house again and say what’s happening to all the jobs in steel manufacturing. Talk to your own colleagues.”

I spoke to a few business analysts that deal with the steel industry and it seems the news is not all doom and gloom at this plant. In fact, the announcement might mean greater stability for both this plant and the Nanticoke steel manufacturing plant at Lake Erie Works. Coke is a product added to iron ore to make steel. Coke ovens across the border have been shutting down. So the coke plant here will be supplying several plants in North America, it will rely more heavily on Lake Erie products. And now, U.S. Steel has a long-term strategic plan for both these plants. Here’s steel analyst James May: “So it will receive the hot rolled coil from Lake Erie. It will then cold roll it, which improves the finish. That’s then coated with zinc to go into markets like automotive outerbodies, appliances, construction. I think you’re going to see a closer relationship between Hamilton and Lake Erie. Lake Erie’s going to produce the steel, it’s going to be finished in Hamilton, and sold to the Southern Ontario and midwest U.S. Market. So, I think there will be closer integration between those two sites. And I think there is longterm stability for those two sites to operate as a single Southern Ontario unit.”

May says there could even be new investment in those plants as their functions are streamlined. There could also be more job losses than the 47 non-union office jobs that were announced if there is overlap in jobs between Lake Erie and Hamilton, because U.S. Steel has a new CEO and his mandate has been to cut costs. U.S. Steel did have a smaller loss than expected in its last reported quarter.

So Hamilton’s Steeltown image is slowly fading away.