The
Stel Salaried Pensioners Organization wishes to thank The Hamilton Spectator
for permission to post the following article published in the August 27, 2007
edition
Stelco Timeline: A story of booms, busts and
back again
The Hamilton Spectator
(Aug 27, 2007)
June 8, 1910: The Steel Company of Canada
(or Stelco) is formed by the incorporation of the Canada Screw Co., Limited
(est. 1866); The Montreal Rolling Mills Co. (1868); The Dominion Wire
Manufacturing Co., Ltd. (1883); The Hamilton Steel and Iron Co., Limited
(1900); Canada Bolt and Nut Co., Ltd. (1910).
1913: Stelco invests in the world's second
electrically powered blooming mill, and North America's first electrically powered
combination rod and bar mill (previously, the energy had been supplied by
steam).
1914: The First World War breaks out. Stelco
redirects its efforts into the production of shells.
1915: The war is a boon to the Steel Co. of
Canada. Profits soar and continue to rise for the next two years. Output of
steel ingots (unfinished steel moulds) double and more than 3,000 new employees
are hired.
1920s: Stelco's location, in the heart of
the area where the most steel was consumed in both Canada and the United States,
proves beneficial. The company is able to receive cargo by boat and shipments
via major railways. It is also close to major electric equipment manufacturing
industries, and the coal mines of Michigan and Pennsylvania.
Stelco becomes the largest single producer
of steel ingots in Canada. Nevertheless, it is not the biggest supplier to the
Canadian market. That honour goes to the U.S. and other foreign steelmakers.
1929-1930: Stelco increases its iron and
steel capacity by 50 per cent. The Depression begins in 1929 but Stelco,
because of its recent expansions and the strength of its finishing works, is
hit less badly than other companies.
1930s: Canadian government increases the
duty on steel imports from the United States, giving Stelco (and Dofasco) the
opportunity to grab more of the Canadian market. By the late 1930s, 62 per cent
of all steel used in Canada is domestic. Stelco is not only able to increase
its share of the Canadian market, but the export market. The company is doing
so well, it spends almost $8 million replacing various open hearths and
blooming mills.
1938: Charles Wilcox, first president of the
Steel Company of Canada, dies.
1939: The Second World War is declared and
this time, instead of simply making shells, Stelco also supplies steel for the
building of ships and army transports.
1943: With 1,500 of the company's 7,000
employees serving in the war, Stelco hires and trains women to fill the gaps
left by the soldiers.
July 15, 1946: About 2,000 Stelco workers
walk off the job in one of the most bitter strikes in Canadian labour history.
They want higher wages, a 40-hour work week and, most importantly, formal
recognition of their union as a bargaining unit. The 81-day strike is later
hailed by academics as a major victory for the union movement.
1950s: The baby boom, immigration and the
consumer boom ensure that industries are kept busy manufacturing and selling
consumer goods. The housing market expands. Automobiles are in high demand; so
are highways and bridges. Stelco's steel capacity triples to three million tons
and the firm invests in a research and development department.
In 1958, the workers at Hamilton Works go on
an 86-day strike, claiming the company is not passing on the benefits of its
success to its employees.
1963: Stelco manages to produce more than
three million tons of ingots in one year, a record for any Canadian steelmaker
up to that time.
1964: Hamilton Works is renamed Hilton Works
in honour of H.G. Hilton, chair of Stelco's board of directors and its former
president.
1968: Stelco sets a new record in steel
production: four million tons in one year.
1969: Once again workers strike from Aug. 1
to Oct. 19.
1970: Stelco moves its head office to
Toronto and with it every major decision involving steel production in Hamilton
would be made in Toronto.
1973: 1,000 office employees are moved from
Hilton Works to offices in the new Stelco Building in Jackson Square. The
building is constructed using an alloy developed by Stelco.
"Stelcoloy" is a weathering steel that changes colour over the years
through oxidization (rust). The rust protects the metal from further damage.
1974: For the first time, Stelco's sales
revenue exceeds $1 billion. Stelco had sharply raised its steel prices by more
than 11 per cent (normally, prices would rise about 5 per cent), blaming the
escalating costs of raw materials. NDP Leader David Lewis accuses Stelco,
Dofasco and Algoma of conspiring in order to increase profits. A federal
commission recommends that further increases must be proven to be directly
linked to cost increases. Despite the scare, Stelco increases its steel prices
for the third time in nine months.
April 22, 1980: the Steel Company of Canada
officially changes its name to Stelco Inc. The name is changed in order to
satisfy new French language requirements, because it is easier to use in French
and English.
In the same year, the first steel is poured
from the new Lake Erie Works in Nanticoke after six years of construction, 15
years of planning and $870 million. It is called "one of the most advanced
and productive steel-manufacturing facilities in the world."
1981: Members of the United Steelworkers of
America, Local 1005, call a strike. The 125-day strike is Stelco's longest
ever.
1982: A recession takes hold of the world.
More than 7,000 workers out of 25,000 are laid off and the company tries to cut
costs further by offering an early retirement package. Steel prices collapse
due to low demand.
1988: The company creates Steltech (Stelco
Technical Services, Ltd.), a research, development and marketing entity which
would sell the company's technology and services to a global market.
1990: Amid a depressed steel market, the
United Steelworkers call another strike and refuse to settle until all have
tentative agreements.
1991: To keep costs in check, the company
brings its main headquarters back to Hamilton. Despite these efforts, Stelco
loses $136 million in 1991, and the price of shares drop from $26 to less than
$6.
1992: The struggling steelmaker cuts 800
jobs. Stelco shares plummet below a dollar each. At the urging of CHML talk
show host Roy Green, hundreds of area residents flock to the Midland Walwyn
brokerage (which had waived its usual brokerage fee) to buy shares in the
steelmaker.
1992: Stelco and Mitsubishi Corp. of Tokyo
team up to build and operate a new type of galvanizing process called the
"Z-line." The Z-line operations at Hamilton's Hilton Works are the
first of their kind in North America. Steel that is subjected to the Z-line
process protects the steel from rusting. Such galvanized steel is used
extensively in the automotive industry.
1993: For the first time in three years,
Stelco is able to pay dividends to its preferred shareholders.
1994: Share prices rise to over $9.
1996: 500 workers at Stelwire's Parkdale
operations go on a 12-day strike. Workers at the Stelpipe operations in Welland
walk out the same year and do not settle for eight months.
1997: Stelco joins North America's steel
companies in a five-year $100-million US advertising blitz designed to spruce
up steel's image as a friendly, modern and reliable product of the future.
1998: Stelco Fasteners Ltd., a Brantford
subsidiary, is purchased for $11 million by U.S. based GenFast Manufacturing
Co.
1999: With rumours of steel industry
mergers, Stelco adopts a "poison pill" strategy, designed to
frustrate hostile takeover bids. The 10-year shareholders'-rights plan provides
for a minimum 60-day period to consider a takeover bid.
Stelco sells Frost Wire Products Ltd., to
Advanced Fence & Wire Manufacturing Company Ltd.
2000: Stelco Stelwire workers hold 100-day
strike.
2001-2002: Blaming high steel imports and a
slump in demand, Stelco loses money in seven straight quarters.
2003: Its losses mounting, its pension plans
underfunded and rumours of bankruptcy flying, Stelco asks its unions for wage,
pension and benefit concessions to help slash hourly labour costs by 20 per
cent. Union leaders decry a restructuring plan that only targets worker wages,
benefits and pensions.
In the midst of the turmoil, CEO James
Alfano steps down after 30 years at Stelco.
Nov. 2003: Former Noranda CEO Courtney Pratt
is named to the top post at Stelco.
2004: Stelco enters bankruptcy protection
under the Companies Creditors' Arrangement Act, not as an insolvent company (a
requirement for CCAA) but as one that argued its mounting debts would drive it
into bankruptcy in a matter of months if the court didn't intervene. At the top
of its list: a $1.3-billion pension shortfall. The decision draws outrage from
Stelco's union leaders, who launch an unsuccessful battle to have it overturned
by the Ontario Court of Appeal and Supreme Court of Canada. Only weeks later,
steel prices soar and the company posted record profits.
After two years of wrangling, the Ontario
government kicks in $150 million to Stelco's pension shortfall. The company
briefly puts itself up for sale, but abandons the idea in favour of
restructuring its operations.
2006: A badly battered Stelco emerges from
bankruptcy protection with U.S. steel turnaround artist Rodney Mott as its new
CEO. It also has a new set of owners in majority shareholders Tricap
Management, Sunrise Partners and Appaloosa Management.
Stock in the new company debuts at $5.50 and
shoots above $21. Shareholders, who saw their investments cancelled in the
bankruptcy process, cry foul. As the new chief at Stelco, Mott cuts costs and
staffing numbers, through buyouts and attrition.
As consolidation heats up in the steel
sector, Mott lets it be known immediately that he is open to a sale of Stelco.
2007: Stelco loses $240 million in its first
four quarters since emerging from bankruptcy protection. With Canadian
steelmakers being swept up in global consolidation, Stelco's stock soars on
speculation that it will be the last Canadian domino to fall. By summer, the steelmaker
announces plans to explore a sale and the potential suitors begin touring the
plant.
Stelco posts a $41-million loss in the
second quarter but attributes most of that to taxes and one-time charges.
Excluding the one-time charges, Stelco has a profit of $5 million in the
quarter, the company says. The results inspire cautious optimism among analysts
who dubbed the quarter the first evidence of a turnaround at the steelmaker.
Source: Hamilton Public Library and Hamilton
Spectator archives