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Published: Wednesday, 10/7/2009

Michigan says 7 battery firms looking at state

BLOOMBERG

Michigan may attract seven makers of battery cells in the next several years as the state tries to lure jobs after auto-industry cutbacks, an economic-development executive said.

Four manufacturers already are part of a $1.4 billion federal program to help set up new plants in the state, said Greg Main, head of Michigan Economic Development Corp. Companies from Texas and Germany and a German-South Korean alliance also may locate in Michigan, according to the state agency.

"Michigan truly is trying to establish not only itself as being the battery capital of North America, but really of the world," said Eric Shreffler, who oversees the projects for the agency.

Michigan, the home of all three U.S. automakers, lost 340,100 jobs during the past year and has the highest unem-ployment rate of any U.S. state.

The economic-development agency estimates the first four battery-cell projects will bring total investment of $1.7 billion and create 6,700 jobs, based on company applications. Those projects may be producing cells by 2012 to power about 300,000 vehicles a year, Mr. Shreffler said.

The state got the $1.4 billion in federal funds as part of the $787 billion U.S. economic-stimulus measure, including grants of $861 million for the first four battery-cell ventures.

Johnson Controls-Saft, a joint venture between Johnson Controls Inc. and Saft Groupe SA, is investing $220 million in a factory in Holland for lithium-ion batteries to be used in future Ford models.

A123 Systems Inc. plans to build a facility to supply lithium-ion cells to Chrysler. Compact Power Inc., an LG Chem Ltd. unit, will make batteries for GM's Chevrolet Volt car.

KD Advanced Battery Group, a joint venture of Dow Chemical Co., based in Midland, Mich., and Kokam Co. of South Korea, has received federal funds and state tax credits for a location in the state.

The board of the Michigan Economic Growth Authority, administered by the economic-development agency, decided yesterday to "highly" recommend Xtreme Power Inc. of Austin, Texas, for a tax credit of about $100 million over four years, starting in 2012, according to the group.

Xtreme Power and Clairvoyant Energy, of Santa Barbara, Calif., agreed last month to buy Ford's former assembly plant in Wixom. Xtreme Power said it plans to make cells for energy-storage systems.

Michigan may also attract SB LiMotive, a lithium-cell joint venture between Samsung Electronics Co. and auto supplier Robert Bosch GmbH, Mr. Shreffler said. SB in July bought Cobasys LLC, a maker of nickel metal hydride batteries based in Orion Township. Cobasys now produces its cells in Springboro, Ohio.

Michigan Gov. Jennifer Granholm announced in July that Fortu PowerCell, a German company, would consider a Michigan site for making battery packs. Fortu officials did not return calls to telephone numbers in Michigan and Germany.

The biggest obstacle to Michigan's plans is that demand for batteries for vehicles such as plug-in electric models like the Volt or Ford's fully electric Focus may not reach even 80,000 units worldwide by 2012, said K.G. Duleep, managing director of Energy & Environmental Analysis Inc.



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