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                                                                   EXHIBIT 10.39



                              ROUGE STEEL COMPANY
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
                          (EFFECTIVE JANUARY 1, 1997)

        WHEREAS, ROUGE STEEL COMPANY, a Delaware corporation (the "Company"),
deems it desirable to adopt a supplemental executive retirement benefit plan
for its key employees and their respective spouses, if any.

        NOW, THEREFORE, the Company hereby establishes the Rouge Steel Company
Supplemental Executive Retirement Plan (the "Plan"), effective January 1, 1997,
to read as follows: 

                                  ARTICLE I
                                PLAN PURPOSE

        The purpose of this Plan is to attract and retain key management
employees by supplementing retirement benefit payments to those key management
employees of the Company designated in writing from time to time by the
Compensation Committee of the Board of Directors of the Company (the
"Participants").

                                   ARTICLE II
                              BENEFIT DESCRIPTION

        A Participant or the Participant's surviving spouse shall be entitled
to benefits under this Plan only when the Participant (i) has accrued at least
five (5) continuous Years of Service after his or her designation as a
Participant in this Plan and (ii) is entitled to normal retirement, regular
early retirement, special early retirement, or total and permanent disability
retirement benefits pursuant to the Rouge Steel Company Salaried Employee
Retirement Plan (the "Retirement Plan"); provided, however, the Compensation
Committee of the Board of Directors of the Company ("Compensation Committee")
may, in its sole discretion by written resolution, waive or reduce the five (5)
continuous Years of Service requirement for entitlement to benefits under the 



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Plan.  Subject to Article VI of this Plan, a Participant entitled to
benefits under this Plan shall be entitled to a monthly benefit, upon the
Participant's retirement under the Retirement Plan, payable pursuant to Article
III of this Plan, equal to 1.9% of the Participant's "Final Average Monthly
Compensation" multiplied by the number of his or her Years of Service (but not
in excess of thirty-five (35)).

        For purposes of this Plan, "Final Average Monthly Compensation" means
the quotient of the average of the Participant's  highest five (5) annual
incentive compensation payments (and which may be zero for a year) attributable
to calendar years (which need not be consecutive) under the Rouge Steel Company
Incentive Compensation Plan that occur during the ten (10) full calendar years
prior to termination of employment, divided by twelve (12).  Notwithstanding
the foregoing, even if a Participant has not been eligible for annual incentive
compensation payments for five (5) years, Final Average Monthly Compensation
shall still be computed as if a Participant had been eligible for annual
incentive compensation for five (5) years, but had received no such
compensation for such additional years.

        For purposes of this Plan, "Years of Service" means years of credited
service, as defined in the Retirement Plan provided, solely for purposes of
computing benefits under the formula set forth herein (and not eligibility or
entitlement), Years of Service for any Participant who is a Group I Employee or
Group II Employee as defined in the Retirement Plan shall also include years of
creditable service used in determining eligibility for benefits under the
Retirement Plan; and, provided further, at the time a key employee becomes a
Participant, the Compensation Committee, in its sole discretion, may in
writing, credit such Participant with additional whole Years of Service solely
for the purposes of computing benefits under the formula set forth herein, but
not for any other purposes such as Plan eligibility or entitlement.

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                                 ARTICLE III
                               BENEFIT PAYOUT

        The benefits under this Plan shall become payable when a Participant
retires from the Company under the Retirement Plan and begins to receive
payments, or when the Participant dies and the Participant's spouse, if any,
begins to receive payments, under the Retirement Plan.

        Benefits payable under this Plan shall be payable to a Participant or
the Participant's spouse, if any, in the same form and manner as contributory
life income benefits are paid to the Participant or the Participant's spouse,
if any,  pursuant to the Retirement Plan; provided, however, if Retirement Plan
benefits are paid pursuant to a contingent annuitant election for benefits by
the Participant pursuant to Article VII, Section 5B, thereof, benefits payable
pursuant to this Plan shall not be paid in the form of a contingent annuitant
election but instead shall be paid in the same form as the normal form of
benefit payment for Retirement Plan noncontributory benefits as if the only
life income benefits payable to the Participant under the Retirement Plan were
noncontributory benefits; and provided, further, that in the event of a
Participant's regular early retirement, special early retirement, or total and
permanent disability retirement under the Retirement Plan, as applicable, the
monthly benefit provided hereunder shall be reduced and/or adjusted in the same
manner as Retirement Plan contributory retirement benefits are reduced or
adjusted in the event of a regular early retirement, special early retirement,
or total and permanent disability retirement, as applicable, but determined as
if Final Average Monthly Compensation is in excess of the Breakpoint in the
Retirement Plan.

                                   ARTICLE IV
                        UNFUNDED AND NON-QUALIFIED PLAN

        This Plan is completely separate from the Retirement Plan.  The
undertakings of the Company herein to each Participant constitute merely the
obligation to make payments as provided for herein from the Company's general
assets and it is the Company's intention that the 


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Plan be unfunded for tax purposes and for purposes of Title I of the Employee 
Retirement Income Security Act of 1974, as amended ("ERISA").  Neither a 
Participant nor any beneficiary nor any other person shall have, by reason of
this Plan, any rights, title or interest of any kind in or to any property of
the Company, nor any beneficial interest in any trust which may be established
by the Company in connection with this Plan.  If the Company transfers any
property to a trust in connection with this Plan such trust shall not be held
for the exclusive benefit of Participants, and any assets held in such trust
shall be subject to the claims of the Company's general creditors in the event
of the Company's insolvency or bankruptcy.

                                   ARTICLE V
                                 ADMINISTRATION

        The Plan shall be administered by the Compensation Committee of the
Board of Directors of the Company which shall have full and exclusive power to
interpret the Plan, to determine the amount and manner of any deferrals and
payments and to adopt such rules and regulations as are necessary for its
administration. The Compensation Committee may delegate specific
responsibilities it assumes under this Plan which are administrative or
ministerial in nature by notifying a delegate as to the duties and
responsibilities delegated.  In that regard, the Compensation Committee
delegates responsibility for claims administration to the Retirement Committee
for the Rouge Steel Company Salaried Employee Retirement Plan (the "Retirement
Committee").

        Claims for benefits under the Plan shall be made in writing to the
Retirement Committee.  If a claim for benefits is wholly or partially denied,
the Retirement Committee shall, within a reasonable period of time, but not
later than ninety (90) days after receipt of the claim, provide the claimant
written notice in a manner calculated to be understood by the claimant of:

        (A)  The specific reason or reasons for denial;

        (B)  Specific reference to the pertinent Plan provisions on which the
denial is based; 


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        (C)  A description of any additional material or information necessary
for the claimant to perfect the claim and an explanation of why such material
or information is necessary; and

        (D)  Any explanation of the Plan's claim review procedure.

        A Participant or beneficiary whose claim for benefits under the Plan
has been denied, or his or her duly authorized representative, may request a
review upon written application to the Retirement Committee, and may submit
issues and comments in writing.  The  claimant's written request for review
must be submitted to the Retirement Committee within sixty (60) days after
receipt by the claimant of written notification of the denial of the claim.  A
decision by the Retirement Committee shall be made promptly, and not later than
sixty (60) days after the Retirement Committee's receipt of a request for
review, unless special circumstances require an extension of time for
proceeding, in which case a decision shall be rendered as soon as possible, but
not later than one hundred twenty (120) days after receipt of the request for
review.  The decision on review shall be in writing and shall include specific
reasons for the decision, specific reference to the pertinent Plan provisions
on which the decision is based and be written in a manner calculated to be
understood by the claimant.

        The decisions of the Compensation Committee and/or the Retirement
Committee shall be final and conclusive on all persons and neither the
Compensation Committee or the Retirement Committee shall be subject to
liability thereon.

                                   ARTICLE VI
                             TERMINATION FOR CAUSE

        Notwithstanding anything in this Plan to the contrary, if the Company
terminates a Participant's employment for Cause, then the Company shall have no
obligation to such Participant or his or her spouse pursuant to this Plan, and
no payments of any kind shall thereafter be made by the Company to the
Participant hereunder.

        For purposes of the foregoing, "Cause" means:

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           (i)   any act or acts of the Participant constituting a felony
           (or its equivalent) under the laws of the United States, any state
           thereof or any foreign jurisdiction;

           (ii)  any material breach, as determined by the Company, by the
           Participant of any employment agreement with the Company or the
           policies of the Company or any of its subsidiaries or the willful
           and persistent (after written notice to the Participant) failure or
           refusal, as determined by the Company, of the Participant to perform
           his or her duties of employment or comply with any lawful directives
           of the Board of Directors of the Company;

           (iii)  conduct which the Company determines amounts to gross
           neglect, willful misconduct or dishonesty; or

           (iv)  any misappropriation of material property of the Company
           by the Participant or any misappropriation of a corporate or
           business opportunity of the Company by the Participant, all as
           determined by the Company.


                                  ARTICLE VII
                                ERISA COMPLIANCE
                               NON-QUALIFIED PLAN

        Notwithstanding any provisions of this Plan to the contrary, the
Company, by written resolution of the Board of Directors or the Compensation
Committee, may terminate the Plan, or may amend or modify the Plan at any time
and in any respect, including as necessary or advisable in order that the
benefits provided by the Plan shall constitute unfunded deferred compensation
for a select group of management or highly compensated employees as described
in Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.  However, no such
amendment or termination shall adversely affect the rights of a Participant or
their spouse, if any,  to the extent of any vested benefits accrued as of the
date of amendment or termination of the Plan.

                                  ARTICLE VIII
                             NO EMPLOYMENT CONTRACT

        Nothing contained in this Plan, or any amendment hereto, shall be
construed as entitling a Participant to be continued in the employ of the
Company for any period of time, or as obliging the Company to keep said
Participant in its employ for any period of time.  Furthermore, nothing 


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contained in this Plan, or any amendment hereto, shall be construed as
restricting in any way the right of the Company to reassign a Participant for
any reason to a new employment position at lower or higher compensation.

                                   ARTICLE IX
                                NONASSIGNABILITY

        No rights of any kind under this Plan shall be transferable, or
assignable by a Participant, spouse or any other person, or be subject to
alienation, encumbrance, garnishment, attachment, execution, or levy of any
kind, voluntary or involuntary.

                                   ARTICLE X
                             RULES OF CONSTRUCTION

        In the event that any provision of the Plan is determined by any
judicial, quasi-judicial or administrative body to be void or unenforceable for
any reason, all other provisions of the Plan shall remain in full force and
effect as if such void or unenforceable provision had never been part of the
Plan. The singular herein shall include the plural, or vice versa, wherever the
context so requires.  A pronoun in the masculine, feminine or neuter gender
shall be deemed, where appropriate, to include also the masculine, feminine or
neuter gender.

                                   ARTICLE XI
                           WITHHOLDING; PAYROLL TAXES

        To the extent required by law in effect at the time payments are made,
the Company shall withhold from payments made hereunder any taxes required to
be withheld from a Participant's wages for the Federal or any state or local
government.



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                                  ARTICLE XII
                                 APPLICABLE LAW

        Except as governed by ERISA, and the Internal Revenue Code of 1986, as
amended, the Plan shall be construed in accordance with, and governed by, the
laws of the State of Michigan.


                                  ARTICLE XIII
                                    HEADINGS

        Headings to the Articles of this Plan are included for convenience only
and shall not control the meaning or interpretation of any provision of this
Plan.

        IN WITNESS WHEREOF, the Company has adopted this Plan this 11th day of
September, 1997.

                                        ROUGE STEEL COMPANY



                                        By:/s/ William E. Hornberger
                                           ---------------------------------
                                              William E. Hornberger
                                        Its:  Vice President




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