Cleveland-Cliffs Inc. (CLF) Earnings Call Transcript & Summary

I'm Dick Peskar, President of USW Local 979. Welcome the Cleveland-Cliffs Cleveland Works. It's my honor to introduce Sherrod Brown. Senator Brown has been a tireless advocate for the workers and for the American steel industry. Senator Brown understands the dignity of work and he has been a true friend to our union for decades. He's a champion of labor and American manufacturing. He faced first in Washington and walks with us on the picket lines. He takes a backseat to no one when it comes to standing up for American workers. Please join me in welcoming Senator Sherrod Brown to the podium.

Dickie, thank you. We were talking a moment ago. He's got more than 40 years in this plant doesn't look like it. So Dickie, thank you. Everyone, everyone here knows all too well how bad policy has hurt steel towns across Ohio on the businesses and workers that build our economy. My wife and I live maybe 2.5 miles from here, and I know what steel job growth means in a community. I know what steel job loss means in a community. Those investments never pay off if we let other countries break the rules. Right now, that's what Mexico is doing. We know that. It's steel imports hit sustainable -- unsustainable levels. They've shown no signs of slowing down, violating a 2019 agreement between the U.S. and Mexico. This year alone, corrosion-resistant steel imports from Mexico are on track to increase to 3x over the historic average, triple the historic average. Cleveland-Cliffs makes corrosion-resistant steel right here on this line. And I've been to this plant maybe 15x over the years and see it. We want that's -- that we want that corrosion-resistant steel to be made right here in Cleveland, and we want to keep it that way. What's worse? It's not just Mexican steel that's coming on, that's coming in, it's Chinese steel. Mexico is just a pit stop along the way as Chinese steel makes its way into the U.S. illegally all to evade tariffs. We've seen China do it again and again, and again, they find new ways to cheat. They find -- they continue to engage in unfair trade practices and it works, Mexican imports of Chinese steel and iron doubled between 2015 and 2023. That's why yesterday, I sent another letter to the administration raising the alarm about this increase in Chinese steel, pushing them to act immediately, not tomorrow to act immediately, to stop China from running steel imports, routing steel imports through Mexico and enforce the 2019 agreement. We know how important trade enforcement is to this industry and its Ohio workers we're seeing how this surge, hurts Ohio workers and hurts American workers all over our great country. Republic Steel, unfortunately announced plans to close its Canton, Ohio and Lackawanna in New York, steel plants last December, 500 steel workers are losing good paying union jobs. We can't -- we won't let trade enforcement hurt anymore or the lack of trade enforcement hurt any more steel workers or shutter any more steel plants. Since last year, we've sounded the alarm in this. We've called on the administration to take action, but the unfair imports keep flooding into our country. That's why I introduced bipartisan legislation with a Republican from Arkansas to reinstate tariffs in the Mexican steel until the imports are back to sustainable promise negotiated levels, giving Ohio workers the opportunity. We know Ohio workers are best in the world. They can make steel as long as the rules are fair. That's why I'm pushing the President to take action. That's why I am pushing, and we'll continue to push the President to take action to force Mexico to stem at steel surge. Now as a new Mexican President -- they just had an election, a new Mexican President takes office and there's a new opportunity to fix this before it gets worse. Everyone knows Ohio steel workers, as I said, and Cleveland-Cliffs steel workers are the best in the world. They can compete -- you can compete with anyone. You just need that fair playing field. I'll always fight to do that. When you love your country, you fight for the people who make it work. That's what this plant is. That's what the United Steelworkers is. That's what Cleveland-Cliffs is. And I'll turn it over to my longtime friend, Dave McCall.

Thank you, Senator. It's great to see you again. It's the so-called free traders who ignore the cheaters who dump their products in our country and violate the law. It's illegal and those that circumvent the law need to be admonished and their acts need to be stopped. When violators like China are identified and stopped at our borders attempts to further promote their illegal acts by surging their illegal products through Mexico and thereby using the USMCA action must be taken. Global overcapacity and surging imports remain an ongoing concern, and that in the U.S. market continues to be a target for predatory and unfairly traded shipments of basic steel, aluminum and other products. Senator Brown has been a champion for fair trade and has not only benefit USW members and their families, but also grows both the public and private sector throughout Ohio based on his efforts. Senator Brown support for fair trade, coupled with a real industrial policy that Bipartisan Infrastructure Act, the IRA and CHIPS and Science, build a stable economy and allows American workers to compete. And when we partner with responsible companies like Cleveland-Cliffs, good family-sustaining jobs are created. Our tax base has increased. Our communities are safer and society prospers. So Senator Brown, thank you for all you've done for us, continue to do for us. Your leadership on these issues in Congress and in the Senate has been amazing over decades now standing up for workers here in Ohio and across the country. So thank you. Next, I'd like to have come up here our District Director for Ohio and Michigan. Great leadership on our International Executive Board, a long-time friend and a great defender of Steelworkers, our Director, Donnie Blatt.

Good morning, everyone. Thank you, President, McCall. Look, first, I want to thank local union President, Dickie Peskar and all of our members from Local 979 for the work that you do, here in this facility to make the best deal in the world. It's challenging sometimes, but look, you all do a great job, and I think you should be very, very proud of the work that you do. I also want to thank Senator Brown. Look, we've never had a better friend in the United States Senate than Senator Brown. His advocacy, his leadership on unfair trade practices and protecting this industry that's so important to our U.S. economy, protecting USW jobs. So we're proud to stand shoulder to shoulder with Senator Brown because he's always there to stand with us. And look, the USW will always stand up against unfair trade practices. We cannot allow these practices to continue, and we will not do that without a fight. It's important that we protect these jobs, these good paying jobs, and it's also important for our national security and also for our supply chain. And that's the important work that Senator Brown does for all of us in the United States Congress, making sure that our jobs are protected, our national security is protected, and we have a supply chain where we don't have to rely on other countries that can cut us off at any time. We also value the relationship that we have with Cleveland-Cliffs and providing these good paying jobs for our members, their families and our communities and partnering with them to make the best product in the industry and in this country. So we valued our relationship. And so I want to bring up the Chairman, CEO and President of Cleveland-Cliffs, Lourenco.

Good morning, everyone. It's an honor to be here with one of the most, if not, the most consequential Senator in the U.S. Senate, Sherrod Brown who I have the honor to call a friend. For Sherrod Brown, everything that he says comes from here. It's not words out of his mouth only, it's out of his heart. When you talk environmental with Sherrod Brown, well, he lives in this neighborhood. He lives 2.5 miles from here. So don't tell about pollution here in this plant because he has seen all. He has been living here for a long time, and he knows how good we are. When he says, we are best in the world is because he saw the difference between now and decades before. He is not a small potatoes type of politician, he is the Chairman of the powerful banking Senate Committee, an entity in the Senate that is feared by banking CEOs. I'm talking big names like Jamie Dimon of JPMorgan and Brian Moynihan of Bank of America and Jane Fraser of Citigroup. And my friend, Jon Weiss, the Chief Operating Officer of Wells Fargo. These guys, they know Sherrod Brown well. He's always in the side of people like us. And I still include myself, and I appreciate the fact that you allow that to happen because you guys know my background. You guys know where I came from. I came from the [indiscernible] and I never forgot the [indiscernible]. I still feel at home right here that Cleveland works. Look at the galvanizing line that produces the vast majority of the high-strength low alloy galvanizing steel that goes in cars in the United States, a line that's better than any line in Japan, any line in Korea, any line in Europe. We are the best. It's not just for rhetoric, it's reality. The only thing we need to have is a level playing field, and that's a lifetime fight for Sherrod Brown. I appreciate that I have Sherrod Brown as a partner, and I really, really would like you guys that vote here in Ohio to understand that these are very important race. And no matter what your politics will incline you to go with, we need to keep our senior senator in Ohio, Sherrod Brown. The other thing that I would like to emphasize is my partnership with the USW, our partnership. It started long ago with my dear friend, Tom Conway, who introduced me to Dave McCall. Dave McCall is today, and I have been saying that to investors. I have been saying that to other steel companies, Dave McCall is the best -- I have been in this business for 44 years. Dave McCall is the most reliable, the most trustworthy partner I have ever had in this business ever. We have been doing things together that we will change the face of this industry. This thing that we are here together for is the beginning of a long, long work that I'm sure that Dave McCall, Donnie Blatt and the USW will be with me. We need to keep Mexico outside of this trade agreement that has only benefits for Mexico and nobody else. The thing that Mexico brings to the table is cheap labor. Nobody will ever convince me that there is any benefit for manufacturing -- to manufacturing something in Mexico that will come back to the United States. We're just paying freight and not paying people. That's wrong. That's wrong. It's morally wrong, economically wrong. There is no good on that. We need to convince investors and Wall Street that supporting this type of practice is robbing Peter to pay Paul. The problem, we are Peter. We are not Paul. Paul is not outside the border. Paul is right here, inside the United States, dressing as a steel worker. And that's what we need to bring back, manufacturing, middle-class jobs. We do that. That's half of the problems solved to have peace, to have a country that's the envy of the world. We don't need help. We have technology. We have the people. We have the solutions. If you have the capital, you have to support. All the rest is really, really easy. That's the message I would like to leave with you. This partnership between company and labor, that Cleveland-Cliffs and the USW have, I know it's kind of unique. I know that. But it's just the beginning of a change of a wave of change that will come to this country. Because when people realized that when labor and companies can work together and be productive and be good for everybody, including investors and everybody can make money together. And that's what keeps this country going, this will take hold. This fight is only beginning. I know that. But we have time. We have generations. I look to the audience, a lot of young people here. You guys are hearing me and you understand what I'm talking about. So let's keep the fight. We are planting the seeds. We are showing the way, all we need you to support this fight going forward. Mexico is just the beginning. Don't buy the cheap stuff that this country is a friend, that country is a friend, 90 years ago, our friends were Soviet Union, not a friend anymore. Japan, we're not a friend at that time. Now they say Japan is a friend. I disagree. I disagree with that. I don't think they are. But that's a rather a question. The point is we are more than friends, we're family. We are the United States of America, and we need to be united. We need to be together. And together, we can produce miracles. And that's what we're trying to do here. Keep that in your mind. Keep that in your mind every morning when you wake up, make your actions to reflect what I'm saying and then people like Sherrod Brown and Dave McCall and Donnie Blatt will be able to do the work and count on this soldier. I will continue to do the fight for years and years to come. And I hope that we'll be able to influence other companies to do the same. Thank you very much.

Thank you, Lourenco, and thank you, everyone. That will conclude the prepared remarks portion of today's press conference. Now we will be able to open it up for any questions that we may have.