United Auto Workers union members of Rouge Industries Inc. of Dearborn reportedly have ratified a new contract with Russian steelmaker OAO Severstal that could lead to 500 job cuts.
A UAW Local 600 official says 1,207 of the 2,000 Rouge workers it represents approved the contract. Had the new contract been defeated it would have jeopardized Severstal’s proposed $285.5 million bid for Rouge and its related assets. Severstal now will take over operations at Rouge Feb. 2.
The new contract calls for initial job cuts of 400 within 12 months and another 100 jobs in 2006, depending on production levels. Additionally, there will be a reduction in vacation days, a 401(k) program will replace pensions and co-pays will increase for health care coverage.
The Detroit Free Press reports some of the eliminated workers may go back toMotor Co., which spun off Rouge in 1989.