Severstal Wins U.S. Loan to Make Improved Steel

The U.S. Department of Energy is ready to loan as much as $730 million to Russian steelmaker OAO Severstal's North American unit to retool its Michigan operations to make lighter, stronger steel for vehicles, according to news reports.

Severstal acquired the Dearborn, Mich.-based business, a former unit of Ford Motor Co. Rouge Steel, out of bankruptcy in 2004. Half the unit's output is used by Chrysler, Ford and General Motors. An additional 30% is sold to tier two suppliers of the Detroit automakers.

The DOE loan is part of a two-year-old program to support technologies that result in more fuel-efficient vehicles. The initiative has loaned more than $8.4 billion since 2009 to aid development and production of electric vehicles, hybrid powertrains and more efficient gasoline engines.

Other recipients of the DOE loans are Ford, Nissan and electric car makers Fisker Automotive and Tesla Motors. Chrysler Group LLC expects to receive a $3.5 billion DOE loan this summer.