Severstal reaches new five-year labor deal with UAW

March 31, 2012
Severstal reaches new five-year labor deal with UAW
By DAVID SHEPARDSON / The Detroit News
Severstal North America, the Dearborn-based steelmaker, said late Saturday it reached a new five-year labor pact with the United Auto Workers union.

Severstal – formerly known as Rouge Steel – said the tentative agreement covers 1,100 production and maintainence workers in Dearborn represented by UAW Local 600.

“We are pleased to have reached a new five-year labor agreement which serves the needs of our people and provides a solid base for company’s future development,” said Severstal North America CEO Sergei Kuznetsov. “The new agreement is an important milestone in our relationship with the UAW that was forged over the years and that helps us work toward common goals of our company and our employees.”

The ratification of the agreement is expected to be completed shortly. The company didn’t release details about the agreement.

The steelmaker is a unit of Russian automaker Severstal OAO and is one of the largest flat rolled steel producers in the United States.

The company suffered a setback in January when the Energy Department cancelled a planned $730 million government loan that was to help them build high-strength auto steel — and create 260 jobs and support 2,500 construction jobs. Severstal had spent years in talks with the Energy Department – and had won preliminary approval in July – only to have the government say it would not go forward on the 180th day of due diligence.

The company – which spent more than $3 million during the loan process — said it was deeply disappointed in the decision. The Energy Department hasn’t made any new loans in more than a year from the $25 billion auto retooling program – and many companies say the government’s decisions have been politically motivated.

Energy Secretary Steven Chu said politics has played no role in the government’s decisions in a number of loan requests.

Severstal operates a new state-of-the-art electric arc furnace in Columbus, Mississippi. It also has a jointly-owned coke-making operation — Mountain State Carbon — in Follansbee, West Virginia.

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