U.S. Steel said Friday it will shut down its blast furnace and steelmaking operations in Hamilton, Ont., for an indefinite period.
The company blamed market conditions and falling orders.
Affected workers will be deployed to U.S. Steel's other operations, the company said.
Rolf Gerstenberger, president of United Steelworkers Local 1005 in Hamilton, estimated the shutdowns would affect 300 to 400 of the plant's 900 workers.
U.S. Steel has been in contract negotiations with its workers in Hamilton since May but has been unable to reach a deal. A week earlier, the company asked for a provincial conciliator, meaning a strike or lockout was possible if the two sides couldn't reach an agreement.
The company wouldn't comment on the labour negotiations.
The United Steelworkers said the promise to redeploy workers feels like "deja vu all over again."
"In 2008, they did the same thing," Gerstenberger said. "They shut the blast furnace down on Oct. 26 and said they're not laying anybody off, and then three weeks later they started laying people off, because you can only find so much busy work."
He also questioned the company's motives, and whether the stalled labour talks might have had something to do with the decision.
The federal government has launched a lawsuit over U.S. Steel's temporary shutdown of two Ontario mills during the 2008-2009 recession, which put 1,500 employees out of work.
The company acquired those assets in 2007 when it bought out Hamilton-based steelmaker Stelco Inc. At the time, U.S. Steel promised to "maintain employment levels" at the sites to win Ottawa's support.
The federal government has claimed the company failed to adequately justify its failure to meet promises on production, research and development and capital spending in Canada.