Severstal North America to get $730 Million Loan for Automobile Lightweight Steel

Severstal North America the Dearborn-based steelmaker expects for an approval of $730 million retooling loan from the U.S. Energy Department in order to build high-strenght lightweight steel for cars and trucks. The manufacturer is expected to build high-strength steel that’s at least 10% lighter that current steel and stronger at the same time.

Also, the technology will help automakers meet rising fuel efficiency requirements in the close future.

Severstal acquired most of Rouge Steel in 2004, which was a part of Ford Motor Co. and Chrysler Group LLC. The plant produces steel for most of Ford’s vehicle platforms.

Lighter steel will help automakers keep the pace with dramatically rising fuel efficiency standards. The industry must improve fuel efficiency standards by 40% between 2012-16 model years, to 34.1mpg, the Obama administration said it will cost the industry $51.5 billion.

The Severstal loan will be the first large award from the retooling program in allmost two years. Since the program has started in September 2008 more than 100 applicants requested about $42.7 billion from the $25 billion Advanced Technology vehicles Manufacturing Loan program. Furthermore the Department of Energy has awarded less than $8.5billion.

Many companies have given up on their loan applications as a result of the long delays. GM has abandoned the its efforts in getting a loan up to $14.4 billion in January. Although Ford, Fisker Automotive Inc, Tesla Motors Inc., and Nissan Motor Co., have received $8.4 billion in loads from The Energy Department, according to detnews.com