Ford Sells Off Rouge Steel, Creates Holding Company

Ford Motor Co. said Thursday that it agreed to sell its Rouge Steel Co. to an investor group that includes a retired chief operating officer of Weirton Steel.

Few details of the deal, including the price, were released. Ford Vice President Peter Pestillo said he hoped that the deal could be completed by the end of the year.

Separately, the auto maker said it has formed a holding company to dull the potential tax sting of its pending acquisition of the Associates finance company.

The value of the move can’t be determined precisely, but an analyst says it may be worth millions to the nation’s most profitable auto maker.

The creation of Ford Holdings Inc. and the sale of 25% of it for $800 million to institutional investors should deflect some of the taxes related to Ford’s acquisition of Associates, Ford officials said.

In a complicated procedure involving seldom-used provisions of the 1986 tax law and foreign tax credits, Ford is avoiding the potential taxes by owning less than 80% of the holding company.

Rumors about the potential sale of Rouge have been circulating for years, intensifying in the past several months.

Pestillo said Rouge Steel operations would continue “substantially as we know them today.” He said he anticipated no change in size of the work force--about 3,300 hourly employees and 750 salaried workers.

A Ford statement said the auto maker signed the agreement with Marico Acquisition Co. Marico, formed solely for the acquisition of the 65-year-old steel-making business, is headed by Carl L. Valdiserri, the former Weirton Steel executive. Valdiserri could not be reached for comment.

Ford and Marico would be among a small number of equity partners, Ford spokesman Bill Carroll said.