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Rouge Industries Posts a First Quarter Loss of $59.8 Million

    DEARBORN, Mich., April 26 Rouge Industries, Inc.
reported a net loss of $59.8 million, or $2.69 per share, for the
first quarter of 2001, compared to a net loss of $12.9 million or $0.58 per
share in the first quarter of 2000.  The loss in 2001 included a $7.4 million
benefit for indemnification by the Company's former parent for environmental
liabilities related to the cleanup of the Rouge Complex.  Steel product
shipments in the first quarter of 2001 totaled 581,000 tons, 163,000 tons or
21.9% lower than the first quarter of 2000.  Raw steel production in the
quarter totaled 556,000 tons, 115,000 tons or 17.1% lower than last year's
first quarter production level.

    During the first quarter of 2001, the Company closed on a new $250 million
revolving loan facility with Congress Financial Corporation.  Borrowings under
the new loan facility are limited to specified percentages of inventories and
receivables.  At March 31, 2001, the Company had $102.8 million of debt
outstanding.

    The Company's production and shipments in the quarter were adversely
impacted by the continuing weakness in the automotive market and by
excessively high inventories resulting from the continuing onslaught of steel
imports into the Company's markets.  As a result, the Company idled the
smaller of its two blast furnaces for 60 days during the quarter to help
balance production with sales.  The idled blast furnace resumed full
production in early March to coincide with an increased order rate going into
April.

    "The first quarter was another difficult quarter marked by substantially
reduced automotive production schedules, steel selling prices in the spot
market that reached a twenty-year low and a continuing glut of foreign steel
imports into the U.S.," said Carl L. Valdiserri, chairman and chief executive
officer.  "For the past three years, unfairly traded steel imports have
created a domestic steel crisis of major proportions.  This is evidenced by 16
steel companies in bankruptcy and the many thousands of steel related jobs
that have been lost during this period.  To exacerbate the problem, natural
gas costs in the first quarter increased 125% over the first quarter of 2000.
The natural gas increase alone accounted for a $12 million cost increase from
a year ago," said Mr. Valdiserri.

    The Company's operating income was also adversely impacted by $17.7
million of direct and indirect costs attributable to the Rouge Complex
Powerhouse explosion and fire that occurred in 1999.  These costs include
$13.3 million for business interruption, $3.5 million for property damage
costs and $900,000 for professional services and other costs.  These costs
were partially offset by $6.4 million of income for anticipated insurance
recovery.  The insurance recovery amount reflects a reduction in a previously
recorded reserve for potential insurance recovery shortfalls.

    "The Company's insurance carrier suspended its business interruption
coverage effective December 31, 2000," said Gary P. Latendresse, vice chairman
and chief financial officer.  "This cessation of coverage caused the Company
to absorb more than $13 million of excess utility costs and blast furnace gas
flaring penalties during the quarter.  Excess utility costs and blast furnace
gas flaring penalties were fully covered in the first quarter of 2000.  The
new co-generation power plant, under construction by an affiliate of CMS
Energy, did not commence operations in the first quarter and caused us to
continue to rely upon the higher cost, natural gas-fueled, temporary steam
boilers.  At this point, the new power plant's blast furnace gas burning
boilers are being tested and we expect steam supply to commence by the end of
May," concluded Mr. Latendresse.

    Through March 31, 2001, the Company has recorded costs of $319.3 million
directly and indirectly attributable to the explosion.  Insurance recoveries
of $268.0 million have been recorded through March for property damage and
business interruption losses.  To date, Rouge Industries has been advanced
$298.1 million.  The Company will continue to record Powerhouse explosion-
related costs and insurance recovery amounts until the new power plant is
operational and the disposition of the idled Powerhouse is resolved.

    "Our order book continues to improve, and we expect shipments to increase
in the second quarter by 15% to 20% over the first quarter level.  Natural gas
usage will abate as the heating season ends and the new power plant commences
commercial steam production.  All of these factors should contribute to the
Company's improved financial results in the second quarter.  The outlook for
the second half of 2001 is still quite cloudy due to the unstable economy and
questions surrounding the ongoing strength of the automotive market.  We hope
that the U.S. government will support the domestic steel industry's efforts
to survive, and we continue all out efforts to improve our yield and
productivity, with the goal of returning to profitability by the end of the
year," concluded Mr. Valdiserri.

    
                             ROUGE INDUSTRIES, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 (amounts in thousands except per share amounts)


                                                         Unaudited
                                                   For the Quarter Ended
                                                          March 31
                                                    2001              2000

    Total Sales                                   $230,195          $321,606

    Costs and Expenses
      Costs of Goods Sold                          281,747           334,838
      Depreciation and Amortization                  6,541            15,151
      Selling and Administrative Expenses            5,625             7,467

      Total Costs and Expenses                     293,913           357,456

      Operating Loss                               (63,718)          (35,850)

    Net Interest Expense                            (2,711)           (1,865)

    Insurance Recovery                               6,393            15,595

    Other - Net                                        989               900

      Loss Before Income Taxes and Equity
      In Unconsolidated Subsidiaries               (59,047)          (21,220)

    Income Tax Benefit                                   -             7,811

    Equity in Unconsolidated Subsidiaries             (709)              512

      Net Loss                                    $(59,756)         $(12,897)

    Earnings Per Share - Basic and Diluted        $  (2.69)         $  (0.58)
    Weighted Average Shares Outstanding (000)       22,236            22,134
    Shipments (000) NT                                 581               744
    Raw Steel Production (000) NT                      556               671



                              ROUGE INDUSTRIES, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                             (amounts in thousands)

                                                   Unaudited
                                                   March 31        December 31
                                                     2001              2000

    Assets

    Current Assets
      Cash and Cash Equivalents                   $  7,548          $  5,433
      Accounts Receivable                          135,239           130,537
      Inventories                                  206,780           269,245
      Other Current Assets                           5,335             8,499
        Total Current Assets                       354,902           413,714

    Net Property, Plant and Equipment              246,700           244,368

    Investment in Unconsolidated Subsidiaries       66,792            66,918

    Deferred Charges and Other                      29,886            16,018

        Total Assets                              $698,280          $741,018


    Liabilities and Stockholders' Equity

    Current Liabilities
      Accounts Payable                            $179,452          $199,775
      Deferred Insurance Recovery                   42,224            44,000
      Accrued Liabilities                           46,780            52,179
        Total Current Liabilities                  268,456           295,954

    Long-Term Debt                                 102,810            66,500

    Other Postretirement Benefits                   75,813            73,288

    Other Liabilities                               18,544            12,430

    Stockholders' Equity                           232,657           292,846

        Total Liabilities and Stockholders'
        Equity                                    $698,280          $741,018