Steel Company of Canada : Stelco Inc. was formed in 1910 as The Steel Company of Canada Limited. The company was incorporated under Dominion charter, June 8, 1910 to take over the businesses of five smaller companies located in the Provinces of Quebec and Ontario: The Montreal Rolling Mills Co., The Hamilton Steel and Iron Co., The Canada Screw Co., The Dominion Wire Manufacturing Co, and The Canada Bolt and Nut Co. Max Aitken (Lord Beaverbrook) had been primary responsible for the merger that became The Steel Company of Canada Limited by accumulating financial investments.
The beginning of the 20th Century was an era of a company amalgamation movement in Canada. Stelco manufactured numerous steel and iron products in common use, such as pig iron, bar iron, forgings, axles, spikes, bolts, nuts, rivets, tacks, screws, horseshoes and wire of all kinds. The merger allowed usual economies under one control management including a saving in the cost of administration, economies in the purchase of supplies and materials with a reduction in expenses of the sales force and distribution.
Better facilities through the greater possibilities for specialized manufacture in each individual plant would also provide to the new company, the possibilities of taking full advantage of the improvements in steelmaking technology. At that time, steelmaking in North America was a very slow and costly process. The iron and steel products imported from Europe such as rails were not adapted to a climate extreme.
The development of railways created a market for rails, spikes and fasteners. The first steel framed buildings were railway stations and hotels. Steel also was needed to build bridges and canals. The settlement of the West around 1900 and the development of agriculture provided a major market to the steel industry.
Company Growth 1910-1940:
The company made progressive growth after the amalgamation. The most important consequence of that growth was the imposition of duty on imported pig iron by the Dominion Government, and a bonus provided to companies per ton for iron made in Canada. The improvement in the construction of Blast and Open-Hearth furnaces and the purchase of new forgings equipment allowed The Steel Company of Canada to increase its production by 146,000 Net Tons of steel processed. Around 1913, the company had certain difficulties in securing ore and coal supplies. This condition was remedied by the acquisition of a large area of ore land in the United States, mainly near Lake Superior. Close to transportation and navigation facilities, these mines ensured an adequate ore source of supply for many years at favorable cost. The construction of Welland and Lachine Canals as part of the vast St. Lawrence River navigation systems would help lower manufacturing production costs to the benefit of all population in Provinces and encourage the development of domestic trade.
In 1914, The Great War began and created a tremendous demand for steel, especially in the manufacture of shell casings. Stelco built its first sheet mill in 1917 and a new by-product coke oven in 1918. Later that year, a benzol and by-product plant was added to take advantage of the coke ovens by-products. A pig-casting machine replaced the old method of sand-casting pig iron at the blast furnaces. The #2 Open Hearth shop and four furnaces were installed during 1916-1917, considerably increasing the plant's ability to produce basic steel. These new machines were constructed according to the most up-to-date designs and were run by electric power.
From the 1920s, innovation in transport, automobiles, and household appliances created a demand in the production of a mass steel cold-rolled and wide sheet. The company benefited from these inventions by supplying products as steel bar and a great variety of fasteners to the automobile and to other industrial customers. Electric cranes, hydraulic machines and the use of blast furnace gas as fuel replaced men and horses.
This move towards automation plus the development of its first safety program for workers cut serious industrial accidents by three-quarters during the 1920 decade. Stelco was able to survive to the great depression of 1929 in reasonable shape by diversifying its production, restraining new investment or reducing expansion of debt. The company took advantage of a period of re-adjustment to improve its equipment and methods of steel making. Stelco built its first modern metallurgical research laboratory in 1931, reported to be the finest in Canada. When business revived in 1936, Stelco was able to finance major modernization and expansion of its Open Hearth and rolling mills. In the same year, Local 1005 of the United Steelworkers of America has formed by the Steel Workers Organizing Committee. The new union asked to improve labor conditions, health, safety, and fewer working hours.
Contribution to War Effort during Second World War:
The production of munitions became of prime importance with the advent of World War II. With the company's experience gained during the Great War, Stelco managers decided that the contribution of the war effort be made by again going into the production of shell forgings. In 1940, Minister C.D. Howe decided that on Stelco property in Hamilton, a new company named The Ontario Forging Limited would be erected. This company would produce many kinds of munitions for Allied countries. All Stelco plants also contributed to this war effort. With the war demand, Stelco diversified its production and began an extensive program of expansion including the construction of a 110-inch plate mill for rolling steel plate for the use of Canadian corvettes. A hot strip mill was added to the plate mill in 1945 marking the beginning of a trend toward flat rolled products which grown rapidly in the coming years. The products manufactured were carbon steels, alloy steels demanded by R.C.A.F. and B.S.B, many types of stainless steel, steel plate, monel, aluminum alloys, copper and copper alloys. Stelco then was able to produce equipment for aircraft, carriers, tanks, automobiles, shells, guns, machine screws and a large number of special products. By war's end, Stelco produced 1,186,000 Net Tons of steel per year.
After a period of very high production, tension began between workers and the company as was often seen at a turning point in the modern history of Canadian industrial relations. In 1946, a three-month strike in Hamilton interrupted its activities. Demanding higher wages, a 40-hour workweek and recognition of their union, about 2,000 employees laid siege at Hilton Works.
Stelco Workforce and Selected Productive Output:
In 1910, The Steel Company of Canada accounted for about 10 per cent of the country's steel ingot production. In that year, 5,100 employees worked in the several plants for about $11.73 wage per week. In 1917, the number of employees increased to 7,800 with an average of $22.74 of wage per week. By the end of the war, The Steel Company of Canada produced 377,724 Net Tons of steel processed, turned 1,312,616 shells of various kinds, 8,242,809 shrapnel and 19,805,824 component of shell parts.
In 1930, 5,175 employees worked for the company with a salary of $29.90 per week. Stelco plants occupied approximately 425 acres of land and produced over 600 diversified steel products. 1,700 men went from Stelco to the armed forces and the number of employees in the mills increased from 7,534 to 9,000 during the war period. Among them, many women replaced men and were trained to the new requirements for high quality products produced. In 1953, the number of employees increased to 13,000 and Stelco processed 1,957,000 Net Tons of steel.
In 1960, 14,600 employees worked at Stelco for an average of $116 per week. The company processed 2,687,000 Net Tons of steel in 1959. In 1965, the number of employees reached 20,262. The number of Stelco employees increased from 21,497 in 1970 to 23,192 in 1975 and decreased to a number of 19,519 in 1983. Unlike the 1930s, the recession of the early 1990, hit the company hard, and 1,100 job losses and drops in the share price persisted into 1990s.
Accomplishments of the 1950s to 1970s:
During the 1950s, Stelco placed emphasis on finishing its facilities to respond to the demand for flat rolled products especially for the automobile industry. The boom in this industry also created a demand in other areas of the transportation related field, such as the expansion of the Canadian highway system, including bridges and steel safety barriers.
There was a tremendous increase in construction in Canada in the 1950s and 1960s. Stelco expanded its activity in the Province of Quebec by opening a new mill situated about 30 miles East of Montreal known locally as "The Gateway to the Seaway". Its name was McMaster Works in honor of R.H. McMaster, Stelco's Officer from 1910 to 1957. This new mill was designed as any in North America replaced the pipe-welding operation at St. Henry Works (Montreal). It featured the most modern method of producing pipe by the "continuous weld process", a new method of making pipes of various sizes used in plumbing, heating, oil and gas distribution lines, as conductors of water, and a wide variety of industrial uses.
Modern office buildings built in larger cities in Canada required large open work areas, and steel provided the most efficient way of achieving that effect (e.g. The Toronto Dominion Centre). Stelco introduced several new products between 1950 and 1975. The patented Ardox nail was a Stelco invention in 1953 and is now produced by manufacturers in many countries. Another innovation introduced is the Stelcoloy weathering steel. It became the standard material for bridge construction. In 1961, the Hollow Structural Sections designed by Stelco were widely used for structural efficiency and aesthetic possibilities (e.g. Ontario Place in Toronto). Stelco structural bolts replaced rivets on a large scale in the 1950s reducing time-consuming in method of connecting steel structures in construction. Other major Stelco improvement in industry is the stabilized wire strand for pre stressed concrete and the Stelcolour coated sheets for the use of commercial and residential buildings.
With the strong market in the 1970s, Stelco decided in 1974 to establish a new plant close to Lake Erie named Lake Erie Works (LEW). This modern steel plant equipped with the highest industrial technology ever undertaken in the Canadian steel industry, began its production during 1980s. Constructed in the purpose of meeting the growing demand for steel in Canada, it had an annual capacity of 1.7 million tons of semi-finished steel production.
Labor Difficulties: 1960s and 1980-2000
In the 1960s, Stelco encountered serious labor difficulties. The company was dramatically expanding through the 1960s. Young workers were hired in masse, and then put into the worst, lowest seniority positions. Tensions were growing throughout 1966, a bargaining year. The usual pressure for a settlement was calculated or considered by fears surrounding technological change and automation in the industry. Low-seniority men, who would have the most to lose in automation-related job loss, felt this tension acutely. On the warm summer evening of 3 August 1966, negotiators met with the provincial Conciliation Board, a central instrument of postwar labor legislation designed to cool down tensions. Some 10,992 workers were on strike. Another similar strike occurred in 1969.
In 1964, Stelco acquired Page-Hersey Tubes Limited located in Welland, Ontario to service the needs of the construction of oil and gas industry and to increase its pipe making activities. The company developed a new process called "Stelform" for producing 60-inches diameter by spiral weld method. This new product placed Stelco in a high position for supplying the industry especially for Artic conditions.
Stelco then re-aligned its sale department. Sales staff were trained according to particular customers: automobile, heavy construction, all kind of supply services and distributors. Engineering and metallurgical departments were established to improve the work of Stelco engineers directly with architects in accordance with customer requirements. Stelco promoted its products by a wide range of publications and advertising: the "Trend" magazine gave architects and engineers a voice to explore new ideas in steel; "Scope", "Steel in Homes", "Steel in Transportation" and "Steel in Mining" were produced for Stelco customers. Stelco's experts published scientific articles and gave conferences in Canada and around the world.
1980s and 1990s proved to be difficult for the company. Stelco lost its position as Canada's largest steelmaker and employment declined considerably. The demand of steel decreased due to slow economic growth in Canada as well as a trend to substitute steel for other materials on a variety of purposes. By this time, there were signs that the challenge of competition from East Asia would force labor and management to collaborate in forging a new survival strategy. An 125 day-long strike occurred in 198, and another one occurred in 1990. Various mills closed in Quebec, Ontario and in Alberta. The company's long-term debt climbed dramatically. Revenues in 1990 were 24 percent less than the previous year, as the company posted a C$200 million loss.
Recent Developments, 2000-current:
In 2004, the Stelco entered bankruptcy protection, and in 2007, the United States Steel Corporation bought the company. Stelco became a subsidiary changing its name to U.S. Steel Canada. The Canadian subsidiary filed for bankruptcy protection in late 2014.
In 2017, a transaction between U.S. Steel Canada and Bedrock Industries Group LLC has emerged from Companies' Creditors Arrangement Act (CCAA) protection and has formally changed its name to Stelco Inc. as it was formally in 1980 by Certificate of Continuance. Today, the number of employees is 2,000 workers located mainly in Hamilton area.
Further Reading:
For further details on the history of the company, please see the book entitled "Elements Combined" written by Dr. Kilbourn published by Clarke, Irwin & Co. (1960).