"Rouge Steel Sold to Russians"

Mike Hudson / The Detroit News

DEARBORN -- Rouge Industries Inc., the steelmaking giant of Ford Motor Co.'s
historic Rouge industrial complex, was acquired Thursday by a Russian
steelmaker after years of staggering financial losses.
Rouge Industries, founded 80 years ago by Henry Ford, filed for Chapter 11
bankruptcy protection Thursday as part of the sale agreement.The buyer, OAO Severstal, Russia's second-largest steelmaker and a major
auto supplier, plans to continue operating the plant but will sell off some
assets and reduce operating costs.
While Severstal plans to continue operating the facility, the deal could
mean layoffs and job cuts. Rouge Industries employs some 2,600 workers,
including 2,000 hourly workers represented by the United Auto Workers and
other unions.

"We view this as importing foreign investment instead of exporting American
jobs," said Carl Valdiserri, chairman and CEO of Rouge Industries.
The sale marks a turning point for an operation that holds a strong place in
Detroit's automaking history. The plant cranked out tons of steel as part of
Henry Ford's vision of a one-site, raw-materials-to-finished-product auto
production complex.
Rouge Industries' Chapter 11 filing allows Severstal to renegotiate the UAW
labor contract with workers.

"The company and the UAW have agreed to meet to discuss a new labor
agreement," Valdiserri said.
Known as a prepackaged bankruptcy, it also shields Severstal from Rouge
Industries' debt and employee pension liabilities.
About 700 Rouge Industries workers are eligible to return to Ford, which
owned Rouge until 1989.

Full story is at:
Auto