BACKGROUND
The lack of constant monitoring and effective investigating of the dumping and subsidizing of imported steel products into Canada and the lack of immediate remedies and trade reactions to address such a problem exaggerate the possibility of a failed court-supervised restructuring process for Stelco. If Stelco fails the restructuring process, it will lead the company to liquidation, which will harm the employees and the communities that depend on the company and make all stakeholders lose their livelihood.
Stelco Inc., located in Hamilton, Ontario, is a large and diversified steel producer with an annual steelmaking capacity of 5.9 million tons. Stelco is involved in major segments of the steel industry through its integrated steel business, mini-mills, and manufactured products businesses. The integrated steel segment provides steel for automotive, transportation, construction, and pipe and tubular manufacturers, etc. As of March 2005, the company had a workforce of 9, 143.
Besides the factors of increased cost of raw materials and energy, and a significant strengthening in the Canadian dollar, Stelco continues to face a high level of low-priced imported steel products in the Canadian marketplace. The foreign steel producers dump their products on the Canadian market at prices below what they sell in their home countries or lower than their production cost. In addition, those foreign steel producers take advantage of obtaining subsidies from their local governments to lower their selling price overseas. Thus, Stelco faces a serious viability issue that contributes to the unfair competition. Suffering a similar fate as several other steel producers, Stelco has entered into bankruptcy protection. The court-supervised restructuring process ...