ROUGE INDUSTRIES U.S. Steel challenges Severstal's bidding

A week after its bankruptcy filing, a troubled steelmakers has two interested buyers.
LIVONIA, Mich. (AP) -- Days after signing a nonbinding letter of intent with Russian steelmaker Severstal, beleaguered Rouge Industries Inc. has attracted the attention of the nation's leading steelmaker, U.S. Steel Corp.
Thomas J. Usher, U.S. Steel's chief executive officer, said Monday that Severstal's nonbinding agreement to acquire Rouge Industries Inc. and its three subsidiaries, Rouge Steel Co., QS Steel Inc. and Eveleth Taconite Co., may be challenged by other bidders, including U.S. Steel.
"We have had interest in Rouge for some time," Usher was quoted as saying by The Detroit News during a speech at the Detroit Economic Club.
"The first one going in the door is not always the first one out of the door," the Detroit Free Press quoted Usher as saying in reference to the agreement with Severstal. "We want to see what opportunities exit. It's just the beginning of the game. We are engaged in the process."
Rouge Industries filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Wilmington, Del., last week, listing $558.1 million in assets and the same amount in debts.
Agreement support
The filing Thursday came the same day as the nonbinding agreement with the Russian firm was announced. Details of the agreement have yet to be made public.
The agreement has won the backing of the United Auto Workers union, with officials there saying the planned acquisition by Severstal offered the best chance to keep Rouge afloat and its 2,600 employees on the job.
That support may be an obstacle for U.S. Steel and other bidders.
"Severstal intends to run the entire operation, while others were looking to scrap the place and shut most of it down," Jerry Sullivan, president of UAW Local 600, which represents Rouge workers, told The News.
Union reluctance about the possibility of an acquisition by U.S. Steel comes in part as that company is in the midst of its own labor tussles after purchasing National Steel Corp. in May.
Since then, some National Steelworkers have voiced dissatisfaction with the agreement.
Usher said the company was honoring its agreement but declined to comment on whether U.S. Steel would be ready to enter into a bidding war for Rouge.
Rouge officials did not return calls seeking comment.