Your Tax Dollars at Work?
With April 17th fast approaching, it’s timely to give some thought to how our hard earned tax dollars are spent. On December 11, 2017, I wrote that Tesla (NASDAQ:TSLA) was linked to a $7B federal loan application for a steel plant in Michigan. The sponsors behind Project "Tim," an ambitious project to supply steel to the auto industry while generating renewable electricity as a by-product, had applied to the Department of Energy's Advanced Technologies Vehicle Manufacturing Loan Program according to a report from Crain's Business Detroit.
The project sponsor, New Steel International, Inc., has been busy since then assembling options to acquire 1,000 acres of land in Durand, MI, for the massive plant. Neither New Steel nor Tesla have issued any material public updates on the project.
However, during the same time the company was ramping up its efforts to acquire land and further develop the project, skeptics and local critics also stepped up their own activities related to the project.
Skeptics of the project have gone on the record to say it is an odd time for taxpayers to make such a large commitment given industry dynamics and lower-priced Chinese imports. In a follow-on December article, Crain’s quoted Wally Wilson, of industry consultant Steel Insights, LLC, as saying “The idea of putting a blast furnace (steel mill) in North America, given the high cost, just doesn't make sense to me…. [t]he problem is, the economics don't work."