Missouri Governor Urges Incentives For Battery Makers

Governor advises state lawmakers to pass an economic development plan he said would help Missouri become a force in the battery production industry.

LEE'S SUMMIT, Mo. (AP) -- Gov. Jay Nixon toured a high-tech battery manufacturing plant Thursday, taking the occasion to urge state lawmakers to pass an economic development plan he said would help Missouri become a force in the battery production industry.

Kokam America Inc., headquartered in this Kansas City suburb, and battery maker EaglePicher Technologies LLC of Joplin would both benefit from incentives in Nixon's economic development package, which remains stuck in the Senate with a week left in the 2009 legislative session.

But the political dynamics changed later Thursday when the Legislature passed and sent Nixon a bill spending $381 million of Missouri's federal stimulus funds for specific purposes -- including $25 million apiece to entice Kokam and EaglePicher Technologies to expand in Missouri rather than in some other state.

Both companies want to increase their production of lithium ion batteries.

Kokam, which makes batteries for the U.S. Department of Defense and has a contract with a Kansas City electric vehicle company, wants to expand its existing Lee's Summit plant. It also is considering building another plant with the incentives it gets from the state.

EaglePicher Technologies president Randy Moore said earlier this week that his company has been seeking to partner with a utility company on a project that would employ about 600 people in the Joplin area. He said the planned expansion would use lithium ion battery technology in conjunction with a wind-generated power plant.

Moore said the company was seeking funds from the U.S. Department of Energy through a competitive grant program to improve the nation's electric grid. Money provided by Missouri could help win the federal grant, he said.

Nixon's economic development legislation would expand the Quality Jobs program, which allows employers to earn a tax credit and keep a portion of the withholding taxes for newly hired workers who make average wages. The program's tax credits currently are capped at $60 million, and the bill would expand that to $100 million.

The legislation also would expand the state's Business Use Incentives for Large-Scale Development program, which awards tax credits to manufacturing companies to pay off bonds used to build their plants. The bill would increase the state's annual tax credit cap for the BUILD program to $25 million from the current $15 million.

Nixon has said that both of those programs would help Kokam.

During his tour of Kokam, Nixon stopped at a few work stations where he was shown examples of advanced batteries the company makes, including ones for military combat equipment and emergency medical devices.

The governor also watched through glass as plant workers in white safety suits, head covers and safety goggles operated robotic machines that seal and test battery cells.

Kokam officials said they have initial plans to build a $650 million, 800,000-square-foot plant in Lee's Summit to supply batteries to what they describe as "next-generation" electric vehicles. The company last month agreed to build a similar plant in Michigan after being offered $144.6 million in tax credits.

"The future is here for us in terms of the battery technology," said Don Nissanka, president and CEO of Kokam America. "We can actually recharge faster. We can fuel electric cars using an electric power supply faster than we can actually fill gas in a gasoline tank. That's doable with our technology today."

He said the U.S. can regain the industrial "edge" it has lost to overseas competitors if Missouri and other states "start using automation and technology as the driving force for the next generation of industry."

"It is critical that we get the message across to all our legislators that this is a change in the industry as opposed to just helping a company," Nissanka added.

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