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, Ontario. 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, from 1988 to 1991, until union and financial difficulties ultimately forced Dofasco to divest the company. Dofasco was the operator of the major Adams and Sherman 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 of the 1930s.
In January 2006, Luxembourg-based Arcelor, then the world's second 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. 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. 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. Dofasco is now part of the combined ArcelorMittal, and has been integrated into their international operations.
Unlike rival Stelco, Dofasco is not 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. Some investors complained that the profits should have been distributed to shareholders as a special dividend rather than giving workers larger bonuses, which was a factor in the under performing stock price despite strong results. As of January 1, 2013, Dofasco (now a standalone subsidiary) reduced the benefits for both drug and dental.
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.
Since 1937, Dofasco has annually held 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. In 2010, the company moved the party to the company-owned recreation park.
Dofasco has had occasional problems with pollution. In 2014, the company pleaded guilty to violating air quality standards in 2012 and paid violation and victim surcharge fines of approximately half a million dollars. In 2015, there was an accidental release of a large plume of iron oxide dust at the plant due to an instrument failure.
"Our product is steel. Our strength is people."
Since 1970, the company has used the same corporate slogan — "Our product is steel. Our strength is people." — to create what Marketing Magazine has called "one of the most clearly defined corporate images in the country." The slogan was created by Hamilton-based Kelly Advertising, who have been the company's ad agency since 1927. The slogan can also be seen as recognizing the importance of its workforce, as the company has a good relationship with its employees.
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