Why Stelco, Canada’s Largest Steel Producer, Failed
For more than half a century, Stelco spearheaded Canada’s steel industry, accounting for almost 50% of Canada’s total domestic output. However, despite its prolonged dominance and sustained rise during The Great Depression, Stelco faltered during the recession of the early 1980s. Stelco’s sharp decline was catalyzed largely by its toxic labor-management relations, failure to keep up with disruptive innovation and its position at the wrong end of globalization.
As the attached report highlights, Stelco’s under-performance is largely reflective of its low productivity and efficiency issues which could have been managed had there been better planned schemes and organizational set-up.
Once considered the engine of the Canadian steel industry, Stelco ended all steel-making operations at its Hamilton Works facility in 2013. As it continues to fight against bankruptcy, lawsuits pertaining to violations of government regulations and the United Steelworkers, Stelco’s trajectory serves as a case study for modern-day businesses suffering from poor labor management and adopting a conservative approach in an age of technological revolution.
This article was written by Muhammad Mustafa Moeen, MBA Candidate at the Schulich School of Business. The article was previously published for CGE’s LinkedIn community found here.