Dofasco
Encyclopedia
Steel
Steel is an alloy that consists mostly of iron and has a carbon content between 0.2% and 2.1% by weight, depending on the grade. Carbon is the most common alloying material for iron, but various other alloying elements are used, such as manganese, chromium, vanadium, and tungsten...
company based in Hamilton, Ontario
Hamilton, Ontario
Hamilton is a port city in the Canadian province of Ontario. Conceived by George Hamilton when he purchased the Durand farm shortly after the War of 1812, Hamilton has become the centre of a densely populated and industrialized region at the west end of Lake Ontario known as the Golden Horseshoe...
, Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
, which is also home to longtime Canadian rival Stelco
Stelco
US Steel Canada is a steel company based in Hamilton, Ontario, Canada.-History:Several existing smaller steelworks combined and were incorporated as the Steel Company of Canada in 1910. Charles S...
. Dofasco is currently a standalone subsidiary of ArcelorMittal, the world's largest steel producer. Previously ordered by the U.S. Department of Justice to divest itself of the Canadian company, ArcelorMittal has now been allowed to retain Dofasco provided it sells several of its American assets instead.
History
Clifton and Frank Sherman founded Dominion Foundries and Steel in 1912, creating a giant that would bring prosperity and identity to the city of Hamilton, OntarioHamilton, Ontario
Hamilton is a port city in the Canadian province of Ontario. Conceived by George Hamilton when he purchased the Durand farm shortly after the War of 1812, Hamilton has become the centre of a densely populated and industrialized region at the west end of Lake Ontario known as the Golden Horseshoe...
. Dofasco was incorporated as Dominion Steel Castings Company Limited in 1912, becoming Dominion Foundries and Steel Company in 1917. Its longtime nickname "Dofasco" was adopted as its legal name in 1980.
Dofasco owned and operated a number of subsidiaries, including National Steel Car, a Hamilton-based railway freight car manufacturer, from 1962 to 1994, and Algoma Steel
Algoma Steel
See also Algoma Essar Steel Algoma is an integrated primary steel producer located on the St. Marys River in Sault Ste. Marie, Ontario, Canada. Its products are sold in Canada and the United States as well as overseas. Algoma Steel was founded in 1902 by Francis Clergue, an American entrepreneur...
, from 1988 to 1991, until union and financial difficulties ultimately forced Dofasco to divest the company. Dofasco was the operator of the major Adams
Adams Mine
Adams Mine is an abandoned open pit iron ore mine located in the Boston Township of the District of Timiskaming, south of Kirkland Lake in the Canadian province of Ontario. It is situated on the Canadian Shield....
and Sherman
Sherman Mine
Sherman Mine is a large abandoned open pit mine in Temagami, Ontario, Canada. It was a major producer of iron ore. The mine was the source of a multi-ton boulder of banded iron formation and was mined from 1967 until 1990 by Cleveland-Cliffs Iron Company...
iron ore mines in Northeastern Ontario until 1990 when Dofasco announced that they would be closing the mines. During the recession of the early 1990s, Dofasco made its first permanent layoffs since the Great Depression
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...
of the 1930s.
Dofasco has won awards for being the "most sustainable manufacturing company" in North America
North America
North America is a continent wholly within the Northern Hemisphere and almost wholly within the Western Hemisphere. It is also considered a northern subcontinent of the Americas...
.
Acquisition
In January 2006, LuxembourgLuxembourg
Luxembourg , officially the Grand Duchy of Luxembourg , is a landlocked country in western Europe, bordered by Belgium, France, and Germany. It has two principal regions: the Oesling in the North as part of the Ardennes massif, and the Gutland in the south...
-based Arcelor, then the world's 2nd largest steel producer by volume, outbid rival German steel producer, ThyssenKrupp AG, to purchase Dofasco. Analysts cited the strengths of Dofasco, including its non-unionized workforce, strong automotive customer base, its unique thin high-strength steel product, and ownership of a Canadian ore mine.
After Arcelor initially presented a hostile bid of $56 per share, ThyssenKrupp and Dofasco signaled their intentions to enter into a friendly merger
White knight (business)
In business, a white knight, or "friendly investor," may be a corporation or a person that intends to help another firm. There are many types of white knights...
. Under that plan, Dofasco would have retained its employee profit-sharing plan and placed in charge of all of ThyssenKrupp's North American operations. Arcelor raised its offer significantly, causing ThyssenKrupp to pull out as further bidding would have downgraded its credit rating. Dofasco paid ThyssenKrupp a breakup fee of $215 million. Dofasco's board recommended the latest Arcelor offer of $71 per share in cash, worth an estimated $5.5 billion. While the breakup fee was criticized by some as excessive, most analysts otherwise praised President and CEO Donald A. Pether and the board of directors for their successful handling of the bidding situation.
Arcelor was itself subsequently taken over by the world's largest steel producer, Mittal
Mittal
Mittal was once an enormous worldwide steel company before merging to create ArcelorMittal.Mittal is a gotra in the Agrawal community in India that is often used as a family name...
. However, in an effort to prevent Dofasco from falling into ThyssenKrupp's hands, Arcelor management locked Dofasco into an independent trust based in the Netherlands. Mittal had reportedly promised to sell Dofasco to ThyssenKrupp, but the Dutch trust has thus far refused the transaction. Dofasco will be retained by the combined ArcelorMittal, and eventually integrated into their international operations, as the parent plans to divest American assets instead to meet US Antitrust regulations.
Labour relations
Unlike rival Stelco, Dofasco is non-unionized, due to its profit-sharing plan with employees. As a result, Dofasco has avoided many of the strikes and work-stoppages which have plagued its cross-town rival. However, there has been some complaints that the employee benefits are too generous. At one point, investors complained that the profits should have been distributed to shareholders as a special dividend rather than giving workers larger bonuses; this was a factor in the under performing stock price despite strong results.While several unsuccessful attempts have been made to organize by the United Steelworkers of America, union negotiations at Stelco have influenced wages and benefits at Dofasco.
In 2007, Dofasco was named one of Canada's Top 100 Employers
Canada's Top 100 Employers
Canada's Top 100 Employers is an annual competition that recognizes the best places in Canada to work. First held in 1999, the project aims to single out the employers that lead their industries in offering exceptional working conditions and progressive human resources policies. Winners are...
, as published in Maclean's
Maclean's
Maclean's is a Canadian weekly news magazine, reporting on Canadian issues such as politics, pop culture, and current events.-History:Founded in 1905 by Toronto journalist/entrepreneur Lt.-Col. John Bayne Maclean, a 43-year-old trade magazine publisher who purchased an advertising agency's in-house...
magazine, the only steelmaker to receive this honour.
Since 1937, Dofasco is well known for its annual tradition of holding a large Christmas party, typically featuring 30,000 guests and a 30 foot tree. From 1993 to 2009, the party was held at Copps Coliseum
Copps Coliseum
Copps Coliseum is a sports and entertainment arena, on the corner of Bay Street North and York Boulevard, in Hamilton, Ontario. Depending on event, the Copps Coliseum has a capacity of up to 19,000.It is named after the former Hamilton mayor, Victor K...
.
In 2010 the company moved the party to the company owned recreation park.