Dept. of Energy Denies $730M Severstal Loan

The conditional loan commitment, announced in July, was expected to create thousands of jobs in Dearborn.

A $730 million loan expected to be granted to has been denied, the U.S. Department of Energy confirmed Friday.

The Advanced Technology Vehicle Manufacturing loan would have gone toward modernization efforts at the Russian steel company's Dearborn plant, allowing them to produce high strength steel for automobile manufacturers.

DOE officials did not release a reason for not closing the loan, but told the Detroit Free Press Friday afternoon that they think the project is still worth pursuing.

"As we have consistently said, the additional due diligence the department conducts after a conditional commitment is signed is an important part of the process and is vital to protecting the taxpayers," DOE spokesman Damien LaVera told the Free Press. "Not every project that received a conditional commitment closes its loan. After conducting a thorough review of this loan application, the department has decided not to move forward."

The loan, , was expected to result in the creation of more than 2,500 construction jobs and over 260 permanent manufacturing jobs in Severstal's Dearborn plant, located on the south end of the city.

In November, two Republican U.S. senators–Indiana’s Dan Coats and Pennsylvania’s Pat Toomey–. House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.). Their claims centered around the assertion that the creation of high strength steel is also being done by several manufacturers, making the purpose of the loan superfluous.

The DOE has not confirmed that the concerns of the senators played into their decision to cancel the loan.

Congressman John Dingell chastised the department's decision, asking for a reason for denial of a loan that could, he believes, help auto manufacturers use domestically produced steel to improve the quality and fuel efficiency of their vehicles.

“This is a sad day in Southeast Michigan, a place that is continuously working hard to advance the president's goal of out-innovating and out-building the rest of the world," Dingell said in a statement. "I urge the Department of Energy to not turn their back on projects that create in-demand, well-paying jobs like Severstal.”

There is no word on what the denial of the loan will mean for the jobs expected to be created. According to the Detroit Free Press, around half of the new positions have already been filled.

Tonto January 10, 2012 at 01:36 AM
How enlightening..........GOSH.............im gonna frame your post and read it daily. The country is trashed and you spit racism and disrepect. What an idiot :)
Frank Lee January 10, 2012 at 11:56 AM
Facts are facts if you can't live with the objective that referring to the president of the united states of America as Osambo is disrespectful and racist than you are oblivious to common sensibilities and easily manipulated. Find one objective fact in any of my above comments that is incorrect and I will be open to constructive criticism. The purpose of forums is to engage in dialectics advancing truth, not to engage in escapist, resentful, behavior, and claiming victim status
Proud US Worker January 12, 2012 at 04:24 PM
HELLO PEOPLE ! Russian, American or from Mars, those are US MAINLY MICHIGAN WORKERS AND FAMILIES.....Instead of worrying about who shook who's hand. Ask the important questions, what can be done to keep US workers, working. I am all for US companies but realize, this Russian company saved THOUSANDS of US jobs by purchasing Rouge Steel at deaths door...
Dearborn Taxpayer January 12, 2012 at 05:32 PM
Proud US Worker, that's great. My father worked for many years at the Ford Rouge Steel operations and I'm glad to see the operation emerge from bankruptcy. But why should taxpayers and our federal government which is already more than $15 trillion in debt subsidize your company with a loan of almost $1 billion? I'm sure the company can finance it's own operations in the private financial markets or perhaps get a loan from the multi-billionaire owner of Severstal's parent holding-company.
Evgeney Mavrin November 09, 2012 at 01:53 PM
All you clearly you have Russian Americans have always hated and despised! You angry as a Russian company bought the plant in the U.S.) And by the way, we also like unhappy as your company ExxonMobil operates the Sakhalin! For most in the U.S. administration, Russia, backward country, a raw material appendage bunch of idiots and people) is a pity that you still very negative


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