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: Russian Steel Mill

Gerry Clinchy
01-06-2012, 07:52 PM

Seems like we're not going to give the Russian company a $730 million loan after all. It was to improve an existing plant.

Severstal was looking for help in improving an advanced high-strength steel plant in Dearborn, Mich.

Issa in October asked Energy Secretary Steven Chu ( why taxpayer money was needed when "announcements made by Severstal during the loan consideration process indicated that the company had ample means to carry out the project."

Can you guess? The loan was to come from the Dept. of Energy. Doesn't mention what the improvements were to be. Could it be to meet meet new regulations imposed by that Dept?

Severstal is controlled by Alexei Mordashov, a chief executive whose net worth is listed at $18.5 billion by Forbes magazine, and is known to have close ties to the Kremlin.

It would have created 2760 jobs, 260 of them permanent; 2500 construction (temporary)

$730,000,000 / 2760 = $264,492
Feel free to check my math in case I made a mistake.

The kicker seems to be that the Russian company had sufficient funds to do the stuff themselves, so why would the govt give them a loan? There was some mention that there was some private sector investment interest.

If it really is a good investment, there should be quite a lot of corporate cash around right now ... so why does this Russian company come to the US govt for a loan? Maybe they should ask China for the loan? Or their own govt?

I just can't make any sense out of it.