Welcome Back, Stelco

[SteelTown]

One of the possible outcome is that U.S. Steel could lose Stelco and returned to Canadian control. I believe Algoma was governed by a board of directors made up of community leaders in the past.

[flar]

A friend of mine who does work at both Stelco and Dofasco says that US Steel is planning some upgrades that suggest they're in it for the long term. I think steel will be made in Hamilton for a long time.


As much as people think the steel mills are an eyesore and big polluter, I really believe the best case scenario for Hamilton is that Stelco stays open. Not only for the jobs, but because if the Stelco closed it would end up sitting there rotting away for decades. The cleanup costs would be astronomical and the current level of investment in Hamilton by both public and private sectors suggests there is no one who would be willing to foot the bill. If there is going to be a gigantic hellfire on the harbour, it might as well be producing something and providing jobs.

As for pollution, they pollute (obviously), but the extent of their pollution in the local environment is overstated. Most of the air pollution from Stelco heads east on the prevailing winds to fall elsewhere. The pollution experienced in Hamilton is mostly from local auto traffic and the hundreds of coal fired generating stations in the midwestern US. Sometimes there is a heat inversion and lower Hamilton stews in Stelco's exhaust. If it feels like the air is cleaner this year it's because summer's heat and humidity has not really arrived.

[emge]

If there truly was a future in steel, where people could still walk into a plant and get a well-paying job, that would be exactly what we need.

However, in a world where you need a two-year diploma to get a job in steel, and an aging and largely retiring workforce, there's nothing steel does anymore that isn't outweighed by the eventual benefits from them closing down.

With the newer Nanticoke works in place, it seems highly unlikely that the eventual consolidation of their operations will retain Hamilton as a part unless they are forced to, especially given how they've slashed jobs in other areas.

Of course brownfield remediation is lengthy, complicated, and expensive -- but if it's inevitable, and it certainly seems to be, however nostalgic we wax, let's look beyond 2012... so that remediation happens by 2032 instead of 2042.

[matt602]

Bethlehem Steel is a pretty good example of what we'll be stuck with if Stelco closes shop. Not a good thing.

[emge]

i am no big fan of casinos, but it was brownfield redevelopment with residential/retail planned as well... why would that necessarily be worse? and it only took about 12 years to happen..

My point all along has been that it's futile to try to preserve these jobs indefinitely, especially when we have older facilities than the company has elsewhere, and a fraction of the workforce here we once did. Trying to preserve things on this particular spot of land for this particular company is likely going to be futile, and if we only have one steel company left employing people in Hamilton, then I think that we can maintain our history and move forward, especially with the geographic location of this piece of property. It would be far different if we were dealing with the other piece of land with other industrial in between it and current waterfront instead of just a little bit to deal with.

[flar]

I think it's actually the Nanticoke site that is in danger of permanent shutdown. The reason is that Nanticoke easily ships across Lake Erie, but US Steel doesn't need shipping access on Lake Erie. They do need shipping on Lake Ontario and the St. Lawrence, which the Hamilton location offers. I believe the Hamilton site also has US Steel's only functional sintering plant. I used to think Stelco was doomed, but after some info I got from people who work in the steel industry, I really don't think it's closing permanently.

[emge]

And that might be where my logic breaks down --- I've always assumed it was a given the newer/efficient/cleaner facility would stay open, but those shipping considerations are very real.

[graupner]

I also believe Hamilton has a much bigger capacity, making it more attractive and productive, even if it's more obsolete.

But still, on a long term horizon ( 30 years) it will close for good.

[realcity]

Stelco was Canada's first steel maker. It was considered that a country wasn't totally developed unless it had its own steel manufacturing. Cities from Montreal, Kingston, Toronto and Hamilton were bidding for the location.

Stelco was the first and if it closes it will be the last steel maker in Canada. After that we won't be making our own steel as a country was would that say?

[adam]

That's the way I feel about lack of production. We barely make anything. Everything is made in China. This is just the next logical step.

[realcity]

The gov instead of bailing out GM should've invested the $ into a true Canadian car company. Something that would be specialized for our environment, similar to how Volvo was made for Sweden's climate. Volvo's are ideal for Canada too but are largely unaffordable here but in Sweden they are the car for the everyday person.

[Emanuel Nicolescu]

Hello,

I'm a Torontonian who likes to keep an eye out on Hamilton. My impression is that the siderurgical complex in Hamilton is there to stay for decades to come. It would be illogical to throw away Hamilton's history with steel and its geographic advantages. We will always need steel products, and we won't always have cheap petroleum products to ship steel from Asia. At some point in the future, manufacture will come back home out of necessity. The sites that will have kept their locational advantages will be the most competitive when that time comes. By its very nature, the market will try to prolong the current state and avoid that time, but wise governments would be wise to encourage acceptance of the inevitable.

Cities are pushed to become service hubs, yet at the same time we see corporations off-shoring IT and other high-paying service jobs to Latin America and Asia where labour is more competitive (read: cheap). Our competitiveness therefore becomes reliant on over-education. Whereas in the past the middle-class made up the largest component of the population and sustained itself through manufacturing jobs, it is now shrinking and the population is polarizing. In spite of what Florida and others like to preach, we can't all make six figure salaries working in the media industry or playing with inflated virtual assets. We live in a physical reality and sooner or later, someone has to produce something tangible to keep the whole construct operational.

I'm surprised by Hamilton's apparent complex of inferiority, especially when it comes to the steel image. The hammer should be proud of its history and its productive capacity. Replacing the mills - a productive element - with condos - a comsuming element - does not seem wise in the long term. Steel is there for a reason, it would be a gross error to forget that. At a time when we strive for cleaner technology, we musn't forget that wind turbines, rail and electrical vehicles all need steel. We can either buy it and transport it from somewhere else, or produce it locally.

All of this applies to most any other city and economy.

Regards,
Emanuel

[realcity]

Thanks Emanuel for your comment.

I totally agree.

I don't want to see Hamilton's east harbour turned into condos. I like to think and wish it will always stay heavy industrial and make steel. I'm not ashamed of hardhats and lunch boxes but proud of them. and proud of Hamilton's history. I don't have an inferiority complex about the views along the elevated Burlington St and the Skyway bc I know you don't see that anywhere else in Canada and probably not many places in the world.

One day perhaps it will become a cleaner industrial area with wind powered instead of coal/coke powered... or in the case of Dofasco hydro (which is still coal powered) blast furnaces. But ya... one day soon, manufacturing will become less globalized again.

[emge]

Is it really a condos or steel dichotomy? We're not losing both companies here.

It seems that if Stelco shuts down (as its workforce has been hacked to a fraction of what it was before, they have newer, if less comprehensive facilities, elsewhere, and they've already done temporary closure) that would allow a wide range of redevelopment and many times the amount of people employed there. Imagine a Master Waterfront Plan that included all of that land too- with retail, residential, commercial - and a remedied waterfront all the way.

And then a commercial buffer, and then Dofasco.

We don't lose our whole heritage. No one's saying "pardon my lunch bucket" But we do gain a well-situated chunk of land that will only be more and more in demand as the surrounding areas continue to increase density and drive up their prices, and as we (eventually) limit sprawl creates a huge chunk that can be better used than keeping that few people employed - and can potentially employ ten, twenty, a hundred times as many over a variety of uses.

When we have a set of circumstances like this, is it better to keep 700 or so (which is what we have left after the retireees) employed on a large chunk of land, especially when steel no longer has the distinction of creating well-paid entry level jobs, which are quite rare and getting rarer, but jobs that have similar education requirements as other entry-level college-education jobs..................... or to start looking long-term at the future and seeing what the potential for that land could be for many different employers?

Not everyone will agree, but I don't think it's an either/or.. I think it's both/and.

[Zaz]

^^ I agree. False choice is a fallacy commonly employed in defending the status quo.

[Emanuel Nicolescu]

I agree about the need for a variety of uses. My point is the loss of the current industrial capacity. It will be needed in the future, and if it is dismantled now, it will cost a lot more to rebuild in the future. Once the Stelco/Dofasco lands are remediated and converted to other uses (commercial/residential/institutional/recreational, it will be practically impossible to return to industrial due to public opposition and cost. Once conversion of Stelco lands begins, the momentum will eventually call for conversion of the Dofasco lands as well. It does, therefore look like an either/or situation.

Small Toronto example: the Red Path sugar factory sits on Queen's Quay at Jarvis. Condos have been going up north and west of it, and now local residents are vocal about how much of an eysore the factory is and about how it blocks views of the lake. It would be so nice, they say, to redevelop the site as a park or, inevitably, more condos. Incidentally I find it interesting how, in the Toronto narrative, highways, warehouses and factories visually separate the lake from the rest of the city, but condos don't.

Again I'll re-iterate my previous comment. Hamilton has the advantage of one of the largest ports on the Lakes, rail connection and highway connection in the middle of an important economic corridor. Once Stelco and other industrial complexes are removed/lost, the advantage is wasted. Once the port lands are redeveloped, and the rail yards north of Barton Street are further removed, the advantage is eventually lost. Hamilton would suffer from this in the future. Keeping a token industrial firm in the area to keep up the mixed use image would do no good. Clustering of similar uses is needed for prosperity, not isolation.

So go my muddled arguments. I'm very curious to see how the Hammer will develop in coming decades.

[markbarbera]

Originally Posted by emge

.When we have a set of circumstances like this, is it better to keep 700 or so (which is what we have left after the retireees) employed on a large chunk of land, especially when steel no longer has the distinction of creating well-paid entry level jobs, which are quite rare and getting rarer, but jobs that have similar education requirements as other entry-level college-education jobs..................... or to start looking long-term at the future and seeing what the potential for that land could be for many different employers?

The employment level, when US Steel restarts Hamilton Works back to steel production, will require close to 2,000 employees, not 700. And these are well-paid entry-level job opportunities (does any decent entry level job nowadays not require minimum college diploma?)

If this land was to become brownfield, what are the odds of finding an employer willing to pay the cost of remediation and then offer well-paying employment positions greater than the 2000 US Steel will be employed at restart? Remeber, a bird in hand is worth two in the bush...

[drpgq]

PITTSBURGH (AP) -- United States Steel Corp. became the latest American steel company to report a loss in the April-June quarter as the slumping economy continued to drag down the industry's biggest customers.

But domestic steelmakers are starting to see a rise in prices and orders as manufacturers and distributors replace their depleted stockpiles. Demand for products made from steel -- from cars to dishwashers -- remains week, however, and steel prices are well below record levels reached last summer.

On Tuesday, U.S. Steel reported its second straight quarterly loss and said third-quarter results would remain in the red.

''Our order book and operating rates remained at very low levels, spot market prices declined and we continued to incur carrying costs for our idled facilities,'' John Surma, the company's CEO, said in a statement.

The Pittsburgh-based company lost $392 million, or $2.92 per share, for the three months through June 30. That compares with a profit of $668 million, or $5.65 per share, in the year-earlier period. A gain from foreign currency exchange narrowed the latest loss by $41 million, or 31 cents per share.

Quarterly revenue fell 68 percent to $2.13 billion.

Analysts surveyed by Thomson Reuters, on average, expected a loss of $3.45 per share on revenue of $2.39 billion. Those estimates generally exclude one-time items.

All three of U.S. Steel's business segments reported losses. But the losses were smaller than the first quarter at its European operations and North American flat-rolled business. Flat-rolled, or sheet steel, is used in autos and appliances.

Its tubular business -- which makes pipes used in oil and gas drilling -- reported a loss compared with a profit a year earlier.

The company expects steel production to rise from extremely low levels in the April-June period.

Higher orders indicate customers may be replenishing their stockpiles of steel in North America and Central Europe, Surma said. To meet the demand, U.S. Steel has begun to restart idled mills and raise prices in its flat-rolled and European businesses.

''Despite these signs of improvement, the outlook for overall demand remains uncertain and the timing and magnitude of sustained economic recovery remains difficult to forecast,'' he said.

U.S. Steel still sees each of its businesses posting an operating loss for the July-September period, Surma said.

The company has laid off thousands of workers and temporarily idled plants since late last year, when steel demand began plunging amid the credit crisis and economic slowdown.

Since the steel market deteriorated late last year, the company has scaled back production, laid off thousands of workers and reduced costs. And while steel production has risen recently to fill orders from manufacturers and distributors who are trying to rebuild inventories, some analysts wonder if U.S. Steel is planning deeper cuts.

Asked whether U.S. Steel would consider permanently closing plants, Surma said in a conference call: ''Things are just so opaque in the market that it's really hard for us to reach a conclusion on that right now. We're looking at it, studying it, considering what the effects are one way or the other.''

In April, U.S. Steel posted its first quarterly loss in more than five years, citing anemic demand, and announced steps to cut costs and raise capital.

Argus Research analyst Bill Selesky said the company's outlook was somewhat cautious.

''They don't see demand picking up too much going forward, but ... the good thing is they think operating rates are going to get a little bit better,'' he said.

Goldman Sachs analyst Sal Tharani said U.S. Steel should benefit from rising flat-rolled steel prices and recovering auto and appliance markets, among other things. He upgraded the stock to ''Buy'' from ''Neutral.''

News of U.S. Steel's loss comes days after other domestic steelmakers reported quarterly losses. Nucor Corp last week posted a second straight quarterly loss. AK Steel Holding Corp., a supplier to the automotive industry, posted its third.

''The good news is that things aren't getting substantially worse, they're starting to stabilize, but the bad news is they're not seeing a pickup in volume,'' John Anton, a steel economist with IHS Global Insight, said Monday.

Output at U.S. mills rose recently to just above 50 percent of capacity after plunging late last year to their lowest levels in more than two decades.

KeyBanc Capital Markets analyst Mark L. Parr said the U.S. steel industry has been operating ''well below the level of real demand,'' and that his firm thinks operating rates could rise to about 65 percent of capacity as new orders come in.

''What you will see is a pickup in steel production,'' he said. ''It's not a reflection of increased demand, but an end to destocking.''

Shares of U.S. Steel shares slid 92 cents, or 2.2 percent, to close at $40.35.

[SteelTown]

Lakeside Steel making bid for Stelco

August 05, 2009
Naomi Powell
Hamilton Spectator
http://www.thespec.com/News/BreakingNews/article/612829

Lakeside Steel Inc. is looking to buy the former Stelco from U.S. Steel.

The Welland-based pipemaker has filed a motion with the Federal Court of Canada seeking to “repatriate” the steelmaker by intervening in the Canadian government’s lawsuit against Pittsburgh-based U.S. Steel.

If its takeover attempt is successful, Lakeside says it will reopen the Canadian plants immediately will abide by the production and employment commitments laid out by the Canadian government when U.S. Steel bought Stelco in 2007.

Industry Minister Tony Clement has asked the Federal Court of Canada to order U.S. Steel to live up to those promises or face fines of $10,000 a day.

“The Lakeside alternative being proposed to the Court would repatriate a former Canadian icon and resume operations immediately at the Hamilton and Nanticoke facilities,” Vic Alboini, CEO of Lakeside said in a release. “We believe this is a viable business solution to address the difficult reality at US Steel Canada.”

Lakeside has not suggested any purchase price for the former Stelco.

[matt602]

That would be pretty cool if it were called Stelco again. Would be great to get bring the name back to the Hammer.