Coats: End of Severstal Loan a Victory for Taxpayers, Hoosier Steel Manufacturers
WASHINGTON, DC – Senator Dan Coats (R-Ind.) today issued the following statement regarding the Department of Energy’s (DOE) decision to end its conditional loan commitment to steel producer Severstal.
“This announcement is a victory for taxpayers and steel manufacturers in Indiana,” said Coats. “The Severstal loan commitment never passed the sniff test, as multiple producers are already manufacturing this high strength steel without taxpayer financing. This is another example of why the government should not be in the business of picking winners and losers.”
In July, the DOE issued a $730 million loan to Severstal under the department’s Advanced Technology Vehicle Manufacturing Program to produce high strength, lightweight steel in Michigan. Six companies already manufacture the Advanced High Strength Steel that Severstal received a loan to produce– including Arcelor Mittal, Steel Dynamics and U.S. Steel in Indiana.
High strength steel has been manufactured in the United States since the 1980s and the current capacity for this steel actually surpasses current demand. Coats first raised concerns about the Severstal loan in a letter to Energy Secretary Steven Chu on August 2, 2011 and asked whether the DOE conducted appropriate market analysis before issuing its loan commitment.
In November 2011, Coats and Senator Pat Toomey (R-Pa.) sent a letter to Inspector General (IG) Gregory H. Friedman requesting a formal review of the Department of Energy’s (DOE) issuance of a conditional loan commitment to Severstal.
In their November letter, the senators wrote:
“Given the tremendous fiscal crisis that we find ourselves in today, it does not seem appropriate for the program to subsidize technologies that have already achieved commercial success through private sector means. American taxpayers deserve to know how the Department of Energy is making decisions regarding these types of loan investments.”
Click here to read the full letter.