In a few weeks, Algoma Steel will strike the first heat at one of its new electric arc furnaces — a major milestone in the company’s years-long transition to greener production.
There is still plenty of work to be done on the $875-million project. But by 2029, when both EAFs are expected to be fully operational, Algoma Steel will no longer need its No. 7 blast furnace or coke ovens — a transformation that will boost production capacity and slash carbon emissions by up to 70 per cent.
The state-of-the-art technology will also usher in another big change at the plant: a much smaller workforce.
The company has been honest about the fact that Algoma Steel will require approximately 1,000 fewer employees when both electric arc furnaces are up and running. The current workforce is close to 2,700, but will drop to roughly 1,700 by 2029.
“That's one of the most sobering parts of this transformation,” said Michael Garcia, the CEO of Algoma Steel, during a wide-ranging interview on our Inside the Village podcast. “We've tried to be open with our employees from the very beginning, helping them understand what this means, what the journey looks like, and some idea of the timeframe that these moves will be made in.”
Although the plant expects some attrition will come through retirements, job cuts are inevitable.
“If we had to do this entire reduction next week, we know exactly who would be affected based on the exact seniority and service of every individual,” Garcia said. “But that's every individual today. So if we do it a year-and-a-half from now, the population's going to be slightly different so it'll be a little different answer.”
Most employees at the plant are represented by two unions: United Steelworkers Local 2251 and 2724.
“There's a lot of language in the collective bargaining agreements as to how these reductions will be made,” Garcia said. “If you're an employee in the union in a job that's being eliminated, it says in the contract exactly what rights you might have to move and to use your seniority to bid into another job or move into another job. We're experienced in how to do that and so we'll have to do that.”
Garcia was asked what message he has for concerned workers who might be listening to the podcast.
“You can talk to your leadership now and you can get a very good picture — a very good understanding — right now based on how long you've been with the company, how much seniority, and what our future headcount is,” he said. “I can assure you you can be given a very good indication on whether you will have a job when we are a 1,700- or 1800-employee company.”
He said his goal is to manage the cuts with “openness, respect and caring for everybody involved.”
“I don't look at an employee and say: ‘Oh wow, he or she is going to be gone in two years so I don't need to give them quite as much of my attention, or I don't need to worry about them,’” he said. “We’re a family and everybody in Algoma Steel is a full, valuable member of the team right now and they'll continue to be that way until the day that they're not on the team. And unfortunately, we're going to be a smaller team in the future. But we're going to be a sustainable company and we're going to be here for decades and decades.”
You can watch Garcia’s full podcast interview HERE.
Hosted by Scott Sexsmith and Michael Friscolanti, the Editor-in-Chief of Village Media, Inside the Village is a news and current affairs podcast that provides a weekly window into some of the best local journalism from across our chain of Ontario newsrooms. Produced by Derek Turner, the program also explores bigger-picture issues that impact people across the province.
Every episode can be found HERE. If you prefer the audio version, it is available wherever you find your favourite podcasts.
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