Cleveland-Cliffs CEO Lourenco Goncalves’ interview with CBC’s Power and Politics was a classic JCS interview.

This is the knee-slapper:

Goncalves said that his original aim when purchasing Stelco was to keep the plant from undercutting in the U.S.

“I bought Stelco because I could not afford anymore having Stelco flooding the market here in the United States to the detriment of my own company,” he said.

This was a far cry of what the company said when it purchased Stelco. In its July 2024 acquisition announcement, Cleveland-Cliffs offered a concrete commercial rationale for the US$2.5-billion transaction:

• A low-cost producer: it described Lake Erie Works as the newest and lowest-cost integrated steelmaking facility in North America.
• Operating advantages in raw materials, energy, healthcare and currency.
• A broader customer base, including construction and industrial customers.
• Approximately US$120 million in anticipated annual cost savings, with “no impact to union jobs”.
• Assets costing substantially less than building an equivalent mill in the United States, and with a lower operating cost than that hypothetical new mill.

Its acquisition presentation even identified “increased throughput at low-cost Lake Erie Works” as a potential source of savings. That is a production-and-integration argument, not simply a buy-it-and-stop-it argument.

And Stelco was not exactly in a strong position at the time.

In May 2022, Stelco closed a deal to sell its roughly 800-acre Hamilton Harbour land parcel in Hamilton, Ontario, to Slate Asset Management for $518 million in gross proceeds. That’s not something a strong competitor does. It used the money to stave off its losses.

Inflation did a number on the company.

A direct look at their full-year financial disclosures highlights the downturn:

Financial Metric	Full Year 2022	Full Year 2023	Year-over-Year Change
Revenue	CA$3.48 Billion	CA$2.92 Billion	Down 16%
Net Income	CA$997 Million	CA$149 Million	Down 85%
Profit Margin	29%	5.1%	Down 23.9 pts
Adjusted EBITDA	CA$1.19 Billion	CA$484 Million	Down 59%

It was so bad that when Cleveland-Cliffs made a play for Stelco, the Canadian federal government gave them millions of dollars and asked for reassurances.

Stelco was in a bad way for years before that: it entered creditor protection in January 2004, owing almost $550 million to creditors. The Ontario Court of Appeal subsequently described two years of efforts to raise capital, sell assets and negotiate a compromise before its restructuring plan was approved. There was even a Stelco-commissioned economic-impact study, begun in 2003 and completed in March 2004, examining alternatives that included closure of Hamilton operations, closure of the entire integrated steel operation, and successful restructuring.

You don’t do that if a company was any sort of threat to another. To paint Stelco as some sort of “disruptor” is hooey.

Rewriting history because your gambits to kiss up to Donald Trump and be called on the carpet for some slippery shenanigans isn’t cool or effective.

The more Goncalves flaps his gums, the worse he looks. Most CEOs go through some sort of media training and counter-interrogation techniques, but apparently Goncalves never got the memo.

I would not be surprised if he steps down to spend more time with his media trainer very soon.