TOPEKA, Kan. (AP) – Japan’s Panasonic Corp. chose Kansas as the site for a multibillion-dollar mega-factory to make electric vehicle batteries for Tesla and other automakers, lured by the largest package of taxpayer-funded incentives the state has offered a private deal.
The company and Gov. Laura Kelly announced the new project Wednesday, just hours after Kelly and eight senior Kansas Legislature executives signed an incentive package worth $829 million over 10 years. The state had created a new program to offer incentives that could reach $1 billion or more in just five months because of Panasonic’s project.
State officials expect the new plant will have about 4,000 employees, which would make Panasonic a “top 20 light” private employer for the state for its size, said Kansas Secretary of Commerce David Toland. He and other officials believe suppliers and other local businesses will create up to 4,000 new jobs, and there will be 16,500 temporary construction jobs.
The company said it will invest about $4 billion in the plant in DeSoto, Kansas, a city of about 6,000 people and 30 miles southwest of Kansas City, Missouri. The city has attempted to rehabilitate a long-abandoned Army munitions factory.
But Kansas resident Jerry Moran also pointed out that the project has national significance because it reduces US dependence on China for manufactured goods.
“It improves our ability to work and enhances our national security,” Moran said during a speech to about 250 state officials and business leaders who gathered for Kelly’s announcement and a reception that followed.
The White House also described the project’s announcement as part of efforts to give the US a more secure supply chain. Brian Deese, the director of the National Economic Council, added in a statement: “The future of transportation is electric.”
Landing the project by Kansas was a huge success for Kelly, a Democrat who faces a tough re-election campaign this year. The announcement also comes as Kansas is flush with cash and able to absorb the financial damage the stimulus packages could otherwise do to schools and state programs.
The announcement ended more than five months of secrecy, during which Kansas officials had to sign non-disclosure agreements to learn the details of Panasonic’s plans. Lawmakers approved the new incentive program in February without state officials ever disclosing who would receive the benefits.
Kelly and lawmakers met in secret for 45 minutes Wednesday to review the details of the stimulus package before approving it in a brief public session. They did not name the company at or after that meeting.
Kansas competed with Oklahoma. Tesla is building an electric vehicle plant in Texas and jointly operating a battery plant with Panasonic in Nevada.
Oklahoma State Senator Roger Thompson, who helped put together his state’s $700 million stimulus package, said he learned Tuesday that Kansas had landed the project.
“They could build another plant in Oklahoma, so Oklahoma could still be in the running,” he said.
Advisors for a Panasonic executive vice president declined to let him answer reporters’ questions at Wednesday’s announcement, including one about whether Oklahoma could still land a plant.
For months after the announcement, Kelly defended the secrecy of the project.
“We approached this project very professionally and very collaboratively, doing what we had to do to protect the confidentiality of the company,” Kelly told reporters. “That’s how business works.”
Kansas officials said Panasonic’s new plant would bring in an average of $50,000, which would far exceed the average Kansas income for individuals of less than $32,000.
Meanwhile, the same law that establishes the new Kansas stimulus program also requires the state to cut its corporate tax rates by half a percentage point for every large deal it closes, so all companies benefit. If two deals close, companies would save about $100 million a year and the state’s top tax rate would drop from 7% to 6%.
Proponents of the new program argued that Kansas had lost out on other major projects because it couldn’t provide enough incentives.
Ohio offered Intel Corp. Earlier this year, it offered around $2 billion worth of incentives to secure a $20 billion new chip fab. Michigan lawmakers in December approved $1 billion in incentives, two-thirds of it to General Motors for factories assembling batteries for electric vehicles.
But Wisconsin reduced incentives for electronics giant Foxconn. It was supposed to invest $10 billion there and create 13,000 jobs, but the deal now covers about 1,450 jobs with a $672 million investment through 2026.
Murphy reported from Oklahoma City, Oklahoma.
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