$730M loan to Severstal halted

Times-Herald Newspapers

DEARBORN – A federal government-sponsored loan aimed at creating more local jobs was shelved Jan. 3.

According to published reports, officials with the U.S. Energy Department withdrew a $730 million loan to Dearborn-based Severstal North America, which would have created more than 200 jobs and 2,000 construction projects.

The deadline for approval of the loan agreement was Jan. 3.

According to published reports, the Department of Energy said in a statement it withdrew the loan after a review revealed reasons not to go forward. The reasons were not disclosed.

Mayor John O’Reilly Jr. said he was disappointed in the decision and believes it was politically motivated.

“I’m devastated,” he said. “(The Energy Department officials) are caving in to political pressure and that’s sad.”

He said the company is a great community partner, keeping many of the same local workers employed at the plant when it was known as Rouge Steel prior to declaring bankruptcy in 2003. Severstal purchased the company the next year.

Phone calls to Severstal North America and the U.S. Energy Department seeking comment were not returned by press time.

(Daniel Heraty can be reached at dheraty@bewickpublications.com.)