Severstal North America has reapplied for a loan from the US Department of Energy to produce lighter and stronger steel for automakers and suppliers.
The Russian steel maker's earlier request for USD 730 million loan was rejected in January by the agency after the Republican led House Oversight Committee raised questions about the loan. Now Severstal is asking for USD 320 million loan.
Mr Alexey Mordashov CEO of Severstal said that "We believe that this investment is needed for the car industry in the United States. With a strong financial backer, we could do it faster."
Mr Thomas Marchak VP of Severstal North America said that there is no question that the company's original loan was rejected because of politics. Republican congressmen accused the Energy Department of favoring Mr Obama administration allies after solar panel manufacturer Solyndra which received a DOE loan filed for bankruptcy.
Mr Marchak said that the company was encouraged to reapply by Michigan legislators. He did not know Mr Steven Chu Secretary of US Energy was speaking just a few miles away at a workshop about making electric vehicles affordable.
Mr Chu said that the department is encouraging investments in lightweight steel for the auto industry but warned that the government is not interested in subsidizing projects that companies can do on their own. If we think a company will do it then it is not an ideal use of taxpayer money.
Mr Sergey Kislyak Russian Ambassador said that Severstal's celebration at the former Rouge Steel operations in Dearborn drew about 350 customers, guests and politicians. A giant banner depicted the steelmaking process and read we can achieve more together. It hung from the rafters as Mr Mordashov.
Mr Rick Snyder Michigan Governor said that Severstal exemplifies the spirit of innovation, manufacturing and entrepreneurship championed by Henry Ford a century ago. The very center of that the best known place in the world is where we stand and sit today on the Rouge complex.
Mr Bernie Ricke president of UAW Local 600 said that he remembers when the union decided to support Severstal over a competing bid by US Steel. The UAW preferred Severstal even though it was asking for workers to take pay cuts.
Mr Ricke said that "We felt that US Steel just wanted the customer order book. With Severstal we felt that they offered the best opportunity for long term investment.”
Source - Freep.com
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