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.

marooned in Dbn January 07, 2012 at 08:12 AM
I will tell ya'll what the DOE wont tell you about why the loan wasn't granted. Severstal is a Russian company. The US Govt. and the Russian Govt is currently in a spat, over missle treaties among other issues. This is merely vindictiveness by the O'Bama administration, for a personal insult suffered by O'Bama himself, at the hands of Russian treaty negotiators, I believe in Europe about a month ago, when they refused to shake his hand at the meeting. Wow, and this was suppost to be about "thousands" of jobs in Dbn. This is not surprising because no matter what you rabid supporters of O'Bama think, your man has been the literal angel-of-death, for jobs in this country.
Frank Lee January 07, 2012 at 09:50 AM
First off there was never thousands of jobs that were going to be created by Severstal in the first place. Secondly anyone even remotely familiar with severstals balance sheet knows that they are in trouble. Companies that have strong balance sheets with competitive products do not borrow from the Federal Government. When was the last time apple or Walmart went begging for a loan. I say this was a responsible Deciscion by the presidential administration
Dearborn Taxpayer January 07, 2012 at 02:41 PM
Perhaps our city leaders and council should also rethink the massive tax abatements given to Severstal last year when the rest of us face a large tax increase on our February and Summer 2012 tax bills!
marooned in Dbn January 07, 2012 at 03:44 PM
I whole heartedly support your proposal, Dbn Taxpayer
Moe January 07, 2012 at 04:16 PM
This is the same administration that gave millions to a company to build cars in Finland and if you have solar in your name and gave to the Obama campaign you get what ever you want.
Frank Lee January 07, 2012 at 04:34 PM
The tax abatements our city gave to Severstal should be terminated. That being said in a rush for a press release and the appearance of sound public policy O'Reilly probably exposed our city to a huge legal liability if this public welfare was ever modified. O'Reilly was never big on the law his track record is one legal setback after another. Judge Summors being the latest in a long line of examples
POWDERBURNER January 08, 2012 at 11:21 PM
Having lost my job and my life ruined by the obongo dictator just 3 days after he put his paw on Lincoln's bible in January of 2009, I find some justice that the unions haven't been able to force this one through...yet... And, yes, torch their tax abatement treaty, let 'em sink or swim like companies used to in our free market, capitalistic system, before he kicked us further down the road to socialism.
Tonto January 09, 2012 at 02:33 AM
President OblameO is also gonna gut our military to switch the money to his support base and purchase votes.
Frank Lee January 09, 2012 at 12:09 PM
Why would Obama gut the military, when he has used the military and expanded the use of military force more than any other president in modern history. America is a country founded on the principle civilian rule of the military and independence from international conflicts. The Department of Defense and the military industrial complex are consuming massive amounts of our GDP, providing little value outside of a highly inefficient jobs program and economic stimulus to certain politicaly connected interest groups. The historical role of the us military and navy prior to WW2, served a smaller more focused role. The military never scaled down from WW2, and their is no no need to support a two front military. If you do not support big government and want smaller and balanced budgets than you have to cut military spending
Tonto January 09, 2012 at 02:35 PM
Spoken like a good communist. I'm sure Oblamer isn't planning on shifting the money to his election campaign by pouring it all over his voter base.
Frank Lee January 09, 2012 at 06:22 PM
Politics is patronage. It is redistribution of income from one interest group to another. This is how government has operated since we evolved from tribal societies into organized communities. It is the only government can operate. So yes President Obama will shift resources to his patrons, so will the Republican if he wins, so will the King of Saudi Arabia, and the prime minister of England. That is because that is the fundamental role of politics in society. If you cannot understand this objective you are naive. Lastly names like Oblamer show a fundamental lack of disrespect for our president, and names like Osambo show you for the degenerate racist you are. No I'm not a communist, no I did not vote for Obama, and yes I support the traditional role of our military under civilian control. Just as George Washington, Jefferson, and Madison wanted it. I can assure George Washington was no communist.
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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