(EDITOR’S NOTE: This story originally appeared on Sootoday.com.)
Roughly 100 people will be laid off at Essar Steel Algoma as the company cuts costs in the face of poor market conditions.
Brenda Stenta, Essar Steel Algoma's manager of corporate communications, said the company does not anticipate near-term market recovery and is "curtailing costs and flexing production levels to match current demand."
"Unfortunately, one of (the cost constraining measures) includes the need for temporary layoffs," Stenta said.
She said it is not clear how long the layoffs will last.
She said the company continues to assess the situation.
"We're well positioned to weather this cycle, but we're taking steps to constrain our costs and ensure the long-term viability of the operation," she said.
Mike DaPrat, president of United Steelworkers Local 2251, said just shy of 100 members are expected to be affected, and he said there could indeed be more if steel prices don’t improve.
“The number is what it is now, and if (the market) doesn’t get better by November it’s going up,” he said.
Kalyan Ghosh, Essar Steel Algoma president and CEO, has said dumped imports have "wreaked havoc" on North American steel markets.
Stenta said "a steady onslaught" of imports has been seen across the continent.
At the same time, the energy sector faces its own issues.
"It has perpetuated a steady decline in both steel pricing and demand that is being felt throughout the supply chain," said Stenta.
DaPrat said the union had just recently received a list of members whose jobs will be affected and work is underway to determine who will be displaced.
Stenta said the company is assisting its employees with Employment Insurance applications.
"We're optimistic we'll be able to welcome them back as soon as market conditions improve," said Stenta.
DaPrat laid the blame for poor market conditions on federal mishandling of foreign steel dumping and a lack of stimulus funding to kickstart a stalled manufacturing sector.
“I’m fed up with a federal government that makes decisions behind closed doors,” said DaPrat.
Conservative candidate Bryan Hayes addressed the layoffs this morning during a policy announcement at his downtown campaign office.
“I am aware of the situation at Essar Steel. My heart goes out to those that have been laid off. I understand there have been 100 laid off,” said Hayes.
Hayes said the layoffs are not related to the $30-million loan the federal government made to Essar Steel Algoma earlier this year.
“That loan is targeted to the modernization process of Essar Algoma and that modernization has to continue to ensure the efficiency and longevity of Essar Algoma,” said Hayes.
He added, “I am confident the steel industry will turn around through the good measures our government has put in for the steel industry.”
Hayes said the modernization should eventually lead to more jobs in the Sault.
“In the long term it is going to create higher capacity which by its very nature is going to create jobs,” Hayes said.
Hayes said he has reached out to the minister of employment and social development, Pierre Poilievre, in regards to the situation.
“I want to make sure the Employment Insurance office here in Sault Ste. Marie is reaching out to [Essar Steel Algoma employees],” said Hayes.
DaPrat criticized federal politicians for not focusing on the economy, pointing to the recent debate over the issue of whether or not women should be allowed to wear niqabs during Canadian citizenship ceremonies.
“You talk about fiddling while Rome is burning,” said DaPrat.
He also lauded local Liberal candidate Terry Sheehan for bringing the Essar layoffs to light, and Justin Trudeau’s promise of deficit spending to stimulate the economy.
“One candidate is worried about layoffs in Sault Ste. Marie and one leader is talking stimulus. Everyone else is balancing the budget,” said DaPrat. “A balanced budget. I don’t know who that serves.”
