U.S. Government Loans For Russian Steelmaker
Dee-Ann Durbin, Tom Krisher, AP Auto Writers
DETROIT (AP) — Two people briefed on the matter say the North American arm of Russia's largest steel company is getting a $730 million loan from the U.S. government.
They say Severstal plans to modernize a plant in Dearborn, Mich., that makes steel for the auto industry. The project will employ around 2,500 construction workers and create 260 factory jobs.
The people asked for anonymity because the Department of Energy wasn't expected to make the announcement until Wednesday morning. Energy Department spokeswoman Karissa Marcum wouldn't comment on the announcement Tuesday. A message seeking comment was left with Severstal North America, which is based in Dearborn.
The money comes from a $25 billion low-interest loan program created in 2007 to help companies retool older factories to build more energy-efficient cars. Severstal makes a lightweight, high-strength steel that can make cars more fuel efficient.
The Dearborn plant has been producing steel for Ford Motor Co. since the early 1920s. Severstal bought it in 2004. Severstal North America is a unit of OAO Severstal, one of Russia's largest steelmakers.
Ford and Nissan Motor Co. have been approved for a total of $7.5 billion in loans from the program. Electric car maker Tesla Motors also has received $465 million in loans to build cars in California.
Chrysler Group LLC is still waiting for the department to approve its request for $3 billion to develop fuel-efficient engines and other technologies. Chrysler CEO Sergio Marchionne had expected to get approval by the end of last year, but said the process was held up because the department was deciding what collateral from Chrysler could be used for the loans.
General Motors Co. withdrew its application for $14.4 billion in Energy Department loans earlier this year, saying it no longer needs them.