October 30, 2013 5:32 pm

Goodbye Steeltown — U.S. Steel permanently shuts Hamilton plant

TORONTO – U.S. Steel Corp. is shutting down its idled iron and steelmaking operations in Hamilton, Ont., affecting 47 jobs, the company said Tuesday.

The steelmaker said the jobs will be eliminated at the end of the year, and it will work to reassign the non-unionized workers who received the notices.

Spokeswoman Sarah Cassella said the company idled the Hamilton Works plant in late 2010, with the majority of the workers given jobs in other parts of the company’s operations.

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U.S. Steel currently employs more than 800 people at the complex which also includes coke and finishing operations.

It said it will take a non-cash charge in its fourth quarter of approximately US$225 million related to the decision.

“Decisions like this are always difficult, but they’re necessary to improve the cost structure of our Canadian operations,” president and chief executive Mario Longhi told a conference call with financial analysts on Tuesday.

“This action will result in a sustainable improvement in our cost structure.”

The company acquired the integrated steelmaking operations when it bought Stelco, one of Canada’s largest steel manufacturers, in 2007.

The purchase triggered a long dispute between Ottawa and U.S. Steel over broken promises it made to secure approval to buy Stelco.

The two sides settled the case in late 2011 with an agreement that saw the company promise to keep producing steel in Canada for at least another four years and make major capital investments at its Canadian mills.

In addition to the Hamilton Works plant, U.S. Steel operates the Lake Erie Works plant in Nanticoke, Ont.

Jessica Fletcher, a spokeswoman for Industry Minister James Moore, said the closure was a business decision.

“The government does not get involved in the day-to-day decisions of companies,” she said in a e-mail.

“The government’s settlement with U.S. Steel contains commitments which provide economic benefit for Canada.”

Rolf Gerstenberger, president of United Steelworkers local 1005, which represents nearly 600 workers at Hamilton Works, said the union had hoped the company would reopen the idled operations.

“The problem we have is our memory is still pretty good. When U.S. Steel bought us in 2007, they said Hamilton Works was a good fit for their corporation,” he said.

The closure of the iron and steelmaking operations in Hamilton are part of a project to cut costs across the company.

In addition, U.S. Steel is stopping operations at two of its coking plants at its Gary Works in Indiana, along with dissolving its Double Eagle Steel Coating Co. venture in Michigan.

“We continue to work on many fronts and to make progress on additional projects that, while not easily quantifiable at this time, will ultimately provide sustainable improvements to our cost structure and margins,” Longhi said.

On Monday, U.S. Steel reported a third-quarter loss of US$1.79 billion or US$12.38 per share due to a big impairment charge on the value of its steel-making operations.

Revenue fell 11 per cent to US$4.13 billion. Excluding the one-time charge, the loss came to 14 cents per share.

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