GOP Senators Want Probe of $730M Loan for Severstal Steel

Two U.S. GOP senators want the Energy Department to investigate a planned $730 million loan to the Dearborn unit of , according to The Detroit News and Detroit Free Press.

The request by Indiana’s Dan Coats and Pennsylvania’s Pat Toomey comes after House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) also raised questions about the loan, according to a story by The Hill.

In July, Patch reported that to for the modernization of existing facilities in Dearborn in addition to the design, manufacture, and construction of new facilities to produce the next generation of automotive advanced high-strength steel.

The creation of the high-strength steel, in particular, is expected to aid in advances in the safety and manufacturing of vehicles by automotive manufacturers.

Severstal estimates the project will generate over 2,500 construction jobs and over 260 permanent manufacturing jobs in Severstal's Dearborn plant, located on the south end of the city.

A story in The Hill contains the contents of the letter from the Senators, which states, among other concerns:

"The Department’s stated purpose for the loan program is to “accelerate the domestic commercial deployment of … new or significantly improved energy technologies.” There is ample evidence to show that several U.S. companies already manufacture the Advanced High Strength Steel (AHSS) for which Severstal is receiving this loan award. As such, the Department’s decision to issue the loan raises very serious concerns."

In addition to the $730M federal loan, Severstal was for two state Brownfield tax credits for the project, valued at $10 million and $1.25 million.