Re: Rouge Steel sold to Russians

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BY JEFF BENNETT
FREE PRESS BUSINESS WRITER

The late-night Thursday news that Rouge Industries Inc. filed for Chapter 11
bankruptcy protection and found a potential Russian buyer hit workers two
opposite ways.

Rouge has lost more than $360 million since 1999, and it was no secret to
employees that the company had been shopping for a buyer for at least the past
two years.
Severstal,Russia's second-largest steelmaker, has a reputation of investing
in its plants and might be eager to establish a strong American presence rather
than cut back the workforce of 2,600.

"As long as they treat us right, we will do our jobs," said the 36-year-old
Charnoske, who was heading home after working the late shift, a job he's held
for two years. "In this economy, it's a blessing to have a job."

But for others, like Vincent Hogrebe, who is getting ready to retire, the
bankruptcy and the agreement by the UAW to discuss a new contract with Severstal
puts him in a bad spot.
Depending on how bankruptcy litigation ends up, Rouge Industries could turn
over its retirement responsibilities to the federal government's Pension
Benefit Guaranty Corp., meaning less money and no health-care coverage for 
retirees.

About 10,000 retirees from National Steel Corp.'s Great Lakes Steel plant in
Michigan and another 25,000 nationwide took a hit in July when National
transferred its pension responsibility to the PBGC after being bought by
Pittsburg-based U.S. Steel. Retirees also had their health-care benefits 
eliminated.

"I just got my 30 years in there and earned my pension in June, and I'm very
concerned," Hogrebe, 54, said. "I saw what happened to Great Lakes Steel, and
it's very scary."
If he loses his benefits and his pension is reduced, he said he might have to
remain at the plant, where he is a material handler, for at least another
decade. "I might have to work until I'm 65 to get my retirement now," he said.

Rouge is the third major steelmaker to go into bankruptcy in Detroit in the
past decade. McLouth Steel went out of business in the mid-1990s and Great
Lakes was sold to U.S. Steel.

Devi Gnyawali, associate professor of management at Virginia Tech, said, "I
don't think we will end up with a Big Three but there will be a lot more
consolidation, mergers, bankruptcies and attempts to establish joint ventures. 
And
if you can buy bargains then why not?"
But in the end, the workers are stuck in the middle.

"I have worked at four different plants that have been bought," said Rouge
worker Abraham Niallabey. "You have to be smart with your money so you don't get
caught."

full article at: http://www.freep.com/money/business/rouge25_20031025.htm


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