The Birth of a Steel Plant (continued) - Dosco and Sysco Years
By Sydney S. Slaven

Unfortunately, the 1930’s were another bust cycle with the Great Depression taking its toll at the Sydney Steel Plant. It took another world war for the plant to get back on its feet although a positive major event took place in 1931. This was the introduction of the Mackie Retarded Cooling Process. It was a method of controlled cooling of rails to rid them of hydrogen bubbles, (shatter), and had been invented by a Dosco metallurgist named I.C. Mackie. Dosco was now able to provide the world’s finest rail.

Another major event that occurred during this period was the formation of the first workers union in 1938 – Local 1064, United Steelworkers of America. The first union – company contract was signed in 1940.

The start of World War II in 1939 signaled the start of another boom cycle for the Sydney Steel Plant. Once more the war effort took all of the steel that the plant could produce. The Plate Mill was recommissioned and, over the length of the war, provided plate steel for the construction of ships that supplied the British Isles, allowing them to survive. By now a #2 Open Hearth shop was operating with two 200-ton tilting furnaces. In time this would expand to include 6 of these furnaces and the phasing out of the ten-50 ton furnaces.

The war years also included a tragic event for Sydney Steel. In 1942, German Submarines sank four ships that were carrying ore from Wabana to Sydney. Seventy lives, mostly Cape Bretoners, were lost. But, 1942 also included a positive event when a 10-ton electric arc furnace was introduced for the manufacture of specialty steel. This technology was basically the same as that of the electric arc furnace commissioned in 1989.

At the end of the war, Canada found itself with a large fleet of modern ships at its disposal. Rather then operate its own merchant navy, they sold them off. Dosco purchased three of these ships for $1.00 each and they served the company well for the next 18 years transporting ore and limestone from Newfoundland.

In 1947, Dosco was one of the major steel plants in North America. Union – company negotiations were carried out in Canada in a group known as the Big Three: Dosco, Algoma and Stelco. A strike occurred at Sydney and was not settled until the Sydney workers received the same pay as the other major Canadian steel industries. However, this was the last time Sydney workers negotiated along with their fellow workers in other parts of the country.

#1 Blast Furnace was commissioned in 1947 and bunker C oil was now used to fire the Open Hearth furnaces instead of producer gas.
The 1940’s and 1950’s were profitable years and the plant employed an average of 5400 people. A look at the plant in 1957 reveals:

• A profitable plant with the potential of 1,000,000-ton yearly production
• 120 modern Coke Ovens with product recovery
• 3 Blast Furnaces
• Six 200-ton Open Hearths
• 700-ton metal mixer
• Blooming and Billet Mill
• Rod and Bar Mill
• Wire and Nail Mill

An important development took place in 1957. This was the construction of a coal blending and treatment plant at the Coke Ovens. Now imported coal of low sulfur content could be blended with local coal thus lowering the sulfur content of iron produced at the Blast Furnace.

The highlight, (or lowlight from today’s perspective), of 1957 was the sale of Dosco to the British conglomerate Hawker Siddeley. This company produced everything from aircrafts to refrigerators and, almost all shareholders forecast a bright future for the Sydney Steel Plant. The only dissenter was Frank Sobey who owned 20% of the shares. He said that Hawker Siddeley had a poor corporate record in Canada and, it was not in the local community’s best interest to sell to them. However, most people dismissed this as sour grapes and a case of his own self-interest over that of the community.

It soon became apparent that Hawker Siddeley was not interested in making steel, only in making money. When capital investment was needed to repair or modernize, their policy was to shut it down or sell it. Case in point was the Wire and Nail Mills. They sold the Nail Mill and closed the Wire Mill rather then spend money on them.

A few positive things did happen during the Hawker Siddeley years, however. Oxygen lancing was introduced into the Open Hearths, which reduced the time needed to produce a heat by half. Also, a very efficient stock unloader was built. The Wabana Mines were closed in 1966 and a much higher grade of iron ore was imported from Quebec. Finally, after 60 years, the steel plant had good control over the impurities from iron ore. Only 20% of the coal being used was from the Cape Breton coalfield and this was blended with low sulphur Virginia coal.

During the 1960’s the local steel industry went into another bust cycle. Hawker Siddeley’s answer to this was massive layoffs and closure of operations. By 1967 the plant was losing money. Hawker Siddeley told the Provincial Government that if they would supply the money to modernize, they would guarantee 25 more years of operation. This was met with a dim view. The Government made it quite clear that they were not in the business of financing major conglomerates.

On October 13th, 1967 (The infamous Black Friday), Hawker Siddeley dropped a bombshell on Sydney. They announced that they were closing the Sydney Plant permanently as of April, 1968. This caught not only the Provincial Government by surprise, but the whole community as well.

The community rallied together and a massive “Parade of Concern” in November convinced the Provincial Government to take over the operation of the Sydney Steel Plant and operate it as a crown corporation.


iIn January of 1968, the plant became the property of the Provincial Government of Nova Scotia and became known as the Sydney Steel Corporation, (SYSCO).
In 1969 the steel industry was back in a brief boom cycle and, for the first time in history 1,000,000 tons of steel was produced. The company also paid an employee’s dividend for the only time in its history. This convinced the Government to make a capital investment in the modernization of the aging mill. 92 million dollars was invested and new equipment included a modern rail finishing Mill, which went into operation in 1973. A Continuous Caster was commissioned in 1975 as part of the modernization. It operated intermittently for six years and, although it proved to be an excellent piece of equipment, it never reached its full potential because it was not co-ordinated with a Basic Oxygen Furnace. The old tilting Open Hearth Furnaces were never able to supply it on consistent bases.

By the mid 1970’s Sysco was back in a bust cycle from which it never recovered. By now Sysco was basically only producing rails. The Billet Mill still operated but its days were numbered. Still, optimism reigned that the plant could be salvaged. A multi- million dollar two-phase modernization was begun. A new Blast Furnace was built and went into operation in 1984. It never operated at full capacity because the Open Hearths couldn’t handle the iron output.

By 1982 the plant was in dire shape financially. A misguided walkout prior to a legal strike occurred. When Sysco informed the rank and file of the blank order books, they returned to work and were then laid off for the summer. Unfortunately, 3300 workers had walked out and only 1200 ever returned.

It was now realized that Sysco would never operate economically as the large integrated plant it had been in the past. It was decided that it would become a mini-mill operation with direct reduction of scrap in an electric arc furnace. This would feed a continuous bloom caster, and thence to a reheat furnace before rolling of rail products in a universal mill. This was the second phase of the modernization period and was completed in 1989.
The Coke Ovens closed in 1988, followed by the Open Hearths and Blast Furnace in 1989.
In 1990 the Provincial Government wrote off the plant deficit of 786 million dollars. They announced that the modernized plant must now show a profit in order to keep operating and that a private buyer would be sought.

MinMetals of China agreed to operate the plant as a joint venture with the government in 1993, leading to their purchase of the whole operation in three years. By this time, only up to 600 employees were working spasmodically and 203 million more dollars of debt had accumulated. In 1996 MinMetals withdrew from their agreement to purchase the plant. For the next few years the government sought another buyer but, no legitimate purchaser evolved

In 1999 the Progressive Conservative party ran in the election with their main platform being the closure of Sysco. This secured the Nova Scotia mainland vote for them and led to their election. On May 22, 2000, the last rail was rolled at the Sydney Steel Plant. Not long after this the Progressive Conservative government, citing the lack of a legitimate buyer, closed the Sydney Steel Corporation.

For 100 years Sydney advertised itself as the steel capital of Eastern Canada. For all its problems, it was certainly a very positive industry for not only the community, but for its contributions during both halves of the Great War of the 20th Century. If there is one thing that can be said of the plant, it is that through good and bad times it was never dull, always interesting – an exciting time to be alive.

SOURCES:

David Erwin - Century of Steel
David Frank - Rise and Fall of Besco Reserves UCCB Library
Sydney S. Slaven - Important Years In Cape Breton Steel Beaton Institute
Sydney S. Slaven - The Dosco Fleet Beaton Institute
Sydney S. Slaven - Safety and Accidents Beaton Institute
Final Report Skills Adjustment Study Beaton Institute
Steel Project Beaton Institute
Muggah’s Creek Watershed Report Beaton Institute