Ohio firm eyes major steel plant in Michigan to serve automakers

An Ohio-based steel technology firm is eyeing nearly 1,000 acres of rural Michigan farmland to build a massive steel-making plant along Interstate 69 near Flint, Mich. 

New Steel International Inc. CEO John Schultes confirmed Monday his company is part of group pursuing a project to build a multibillion-dollar manufacturing facility that it has kept under wraps for months using the code name "Project Tim."

"It's a little too early to really go public with things," Schultes said in a telephone interview with Crain's Detroit Business, an affiliate of Automotive News. "There are a lot of companies trying to make this happen."

Few details have emerged yet about the plant, the timeline or its financing. 

However, New Steel International has sought a $7 billion federal loan through the U.S. Department of Energy's Advanced Technology Vehicles Manufacturing Loan Program for construction of a plant in Durand, Mich., that would produce new high-strength steel, according to a source briefed on the company's plans.

Schultes confirmed New Steel International has applied for a Department of Energy loan, but declined to divulge the amount or details of the application.

The Advanced Technology Vehicles Manufacturing Loan Program was created by Congress in 2008 at the height of the financial crisis to help automotive companies finance development of new energy-saving technology.

Ford Motor Co. borrowed $5.9 billion from the $25 billion loan fund for updating manufacturing facilities that produce fuel-efficient cars and light trucks, including Michigan plants in Dearborn, Flat Rock, Livonia, Sterling Heights, Wayne, Ypsilanti, according to the federal energy agency.

A Department of Energy spokesperson declined to comment on the application.

The source briefed on the company's plans said Schultes has told members of Michigan's congressional delegation that the project has "investor interest" from General Motors, Tesla Inc. and DTE Energy Co.

A GM spokesman declined to comment.

Steel and aluminum suppliers have been locked in a high-stakes battle for more business from automakers, who are seeking to make their vehicles lighter to achieve higher fuel economy. GM, for example, has embraced high-strength steel for its trucks while competitor Ford has moved toward aluminum, particularly on the latest generation of F-series trucks.

State of the art

In a meeting last week in Washington, New Steel representatives portrayed the Durand project as a state-of-the-art steel plant that would use clean coal-burning technology to melt iron pellets and capture a portion of the energy emitted in the steel-making process for electricity, according to a source.

The company has portrayed the project as having a renewable energy component.

Schultes declined to discuss investors and potential customers of the plant's steel or renewable energy when asked specifically whether GM, Tesla and DTE were involved in the project.

"Whoever is telling you all of this is certainly well informed, but I'm not going to confirm or deny it," Schultes said.

The "Project Tim" plant site's proposed footprint is northeast of the Durand city limits on mostly open farm land along I-69.

Since late 2016, real estate broker Troy Crowe of Crowe Real Estate LLC has been securing land purchase options with farmers and homeowners in the footprint envisioned for the plant.

Durand's city manager, Colleen O'Toole, has previously said the city owns 124.5 acres in the proposed footprint of the plant and has options to buy another 364 acres. O'Toole did not return a message Monday seeking comment.

Footprint changed

Crowe said Monday that the footprint has changed in recent months "because we do have a person who is not willing to sign an option."

Developers are considering plans to straddle both the south and north side of I-69 in Shiawassee County's Vernon Township, Crowe said.

"We are pretty close," he said. "We do have a few houses that we have to get yet."

Crowe said he signed a nondisclosure agreement to not divulge the companies involved in Project Tim. "I cannot comment," he said.

New Steel International's offices are based in Middletown, Ohio, about 35 miles north of Cincinnati.