Severstal gets $730M modernization loan

WASHINGTON — U.S. Energy Secretary Steven Chu announced July 13 the offer of a $730 million conditional loan commitment to Severstal Dearborn LLC. The funding will support 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 facilities will produce a wide range of advanced high strength steels, which will enable manufacturers to reduce the weight of steel components used in vehicles, creating a 10 percent reduction in total vehicle weight while meeting safety regulations.

The project has the potential to reduce petroleum-based fuels consumption by nearly 30 million gallons annually, avoiding over 260,000 metric tons of carbon dioxide emissions.

The loan guarantee programs support the deployment of commercial technologies along with innovative technologies that avoid, reduce or sequester greenhouse gas emissions, while Advanced Technology Vehicle Manufacturing supports the development of advanced vehicle technologies.

The Severstal project could increase the supply of advanced high strength steel in North America as demand grows for fuel-efficient vehicles. An increased supply for this technology will help U.S. automotive manufacturers meet the future design, weight, and safety requirements of advanced technology vehicles. Severstal estimates the project will generate over 2,500 construction jobs and over 260 permanent manufacturing jobs.

“(The) announcement is great news for the company and its workers, for Michigan and for the nation,” Sen. Carl Levin said. “To compete today and in the future and create jobs, our manufacturers must develop breakthrough technologies in a range of areas, and this loan announcement is an important step toward developing and marketing such technologies.”

“In Michigan we certainly welcome this announcement that will put so many people back to work,” said Sen. Debbie Stabenow, author of the ATVM initiative. “An old factory is being transformed to produce advanced technology products that will make our cars safer and more fuel-efficient, and employ thousands of Michigan residents in the process. I am very thankful to Secretary Chu and his staff for selecting Michigan for this investment.”

“I am extremely pleased that the Department of Energy has decided to grant Severstal an Advanced Technology Vehicle Manufacturing loan,” said U.S. Rep. John Dingell (D-Dearborn).

Including Severstal, the department has provided over $9 billion in loans to advanced technology vehicle manufacturers, including Ford Motor Co., Fisker Automotive, Nissan North America, Tesla Motors, and Vehicle Production Group.