Detroit –– Hundreds of millions of taxpayer dollars designated for green manufacturing are being spent on one of America’s most carbon-intensive heavy industries: Big Steel.
The Rouge plant in Dearborn, Mich., is an icon of old American manufacturing — the steel mill that anchors the legendary Ford Rouge complex that has produced everything from Model As to WW2 airplanes to today’s F-150 pickup. It is now a symbol of how President Obama’s Advanced Technology Vehicles Manufacturing program to build earth-friendly electric cars has run amok: the Energy Department has approved a $730 million subsidy for the Rouge mill (now owned by Russia’s Severstal) to produce steel.
The logic is that the steel will find its way into the more fuel-efficient cars that Obama has mandated. But automakers have been demanding lighter and stronger materials since the invention of the automobile. And the steel business is locked in an eternal competition with the aluminum industry to meet auto-industry specs. By Washington’s skewed supply-chain logic, Detroit Edison’s Motown coal plant — which supplies power to Rouge — should also get green loans because it endeavors to deliver cheaper energy to make steel.
Severstal’s owner, Russian billionaire Alexei Mordashov (one of the world’s richest men with a net worth of $19 billion) has understandably made headlines given that his huge multinational didn’t need taxpayer money because high-strength steel is already in significant production. “It would seem to be a waste of taxpayer funds to subsidize (Rouge) when there is already more than enough production available for this material,” Rep. Darrell Issa wrote to Energy secretary Stephen Chu.
But there’s the larger question: When, asks Issa, did Obama’s Department of Green-Tech Winners and Losers start classifying steel as a green-auto component?
The Energy Department’s explanation — that steel production supports 260 jobs and 2,500 more in the construction industry — sounds more like a jobs program than “advanced technology research.”
Indeed, like the bailed-out GM and Chrysler, the White House seems to be motivated more by sustaining an industry with Big Labor ties (United Steelworkers Union represents Severstal workers).
Your tax dollars at work.