Dearborn, Michigan – Russia’s OAO Severstal has sold the steel plant at the heart of Ford’s Dearborn truck complex to Ohio’s AK Steel for $700 million.
“The acquisition of Severstal Dearborn allows us to grow our business profitability and better serve our customers,” says James L. Wainscott, chairman, president, and CEO of AK Steel. “It furthers our automotive strategy and strengthens our carbon steelmaking footprint. It also combines great employees at Dearborn with great employees at AK Steel to strengthen a terrific company that is better able to compete, and to win, in the global steel marketplace.”
Severstal also sold a Mississippi electric arc furnace steel plant for $1.6 billion, effectively exiting the U.S. market entirely. The company hopes to finalize the transaction by the end of 2014.
The steel plant is part of Ford’s historic River Rouge complex. In Henry Ford’s day, iron ore came into one end of the massive facility, and Model Ts came out the other end. Every major step, from steel-panel creation to iron casting to parts finishing to final vehicle assembly took part within the Rouge.
Now called the Ford Rouge Center, the facility still houses steel making and Ford’s Dearborn Truck Plant, home of the F-150 pickup.
Ford spun off the steel division in 1989, and Rouge Steel eventually went bankrupt in 2003. Severstal bought the assets in Bankruptcy Court auction and has invested heavily in Dearborn for more than a decade.
AK says Dearborn’s blast furnace, which was rebuilt in 2007, is among the most efficient and productive blast furnaces in the world for its size. The plant also began operating a new pickle line tandem cold mill and a new hot dip galvanizing line in 2011.
The plant employs approximately 1,400 people and is capable of producing about 2.5 million tons of finished steel per year, potentially raising AK’s annual output by 50% to 7.5 million tons per year.
Sources: AK Steel, OAO Severstal