TOPEKA, Kan. (AP) – Japan’s Panasonic Corp. has chosen Kansas as the site of a multibillion-dollar mega-factory to produce electric vehicle batteries for Tesla and other automakers, Governor Laura Kelly announced Wednesday.
The decision comes five months after the Democratic governor and the Republican-controlled legislature rushed to approve a taxpayer-funded incentive package of up to $1 billion, the largest in the state, to attract the company and the “thousands of jobs” promised, even though most of them did not know which company was at stake. Kelly said Wednesday that the actual incentives will total $829 million over 10 years.
The plant will be located in De Soto, Kansas, a town of approximately 6,000 people and 30 miles southwest of Kansas City, Missouri.
“People across the country look to Kansas as a leader in economic development,” Kelly told a gathering of about 250 state officials and business leaders in downtown Topeka on Wednesday.
Japanese broadcaster NHK reported this year that the company was looking to build the plant in Kansas or Oklahoma, near Texas, where Tesla is building an electric vehicle factory. The two companies jointly operate a battery plant in Nevada.
Kelly’s administration said the facility it was pursuing would be the largest economic development project in Kansas history. They said the company would employ 4,000 people and that other companies supplying or supporting it would create several thousand additional jobs. They said the business would pay an average of $50,000, which would far exceed Kansas’ median income for people under $32,000.
Kelly lobbied for permission to offer tax credits, wage subsidies and training funds to attract what his administration called a $4 billion project that at least one other state was also pursuing.
The measure requires the state to cut its corporate tax rates by half a percentage point for every big deal struck so that all businesses benefit. That would save companies about $100 million a year and lower the state’s top rate from 7% to 6% if two deals were completed.
Proponents of the measure argued that Kansas lost other major projects because it could not offer generous enough incentives.
Oklahoma’s Republican-controlled legislature this year approved an incentive package to provide rebates of up to nearly $700 million in public funds if Panasonic meets specific benchmarks, including at least 4 $.5 billion in capital spending and the creation of at least 4,000 jobs over the first four projects. years. State officials say the money could be returned to the general fund or used to attract another major project.
Ohio recently offered Intel Corp. incentives worth about $2 billion to secure a new $20 billion chip manufacturing plant. Michigan lawmakers in December approved $1 billion in incentives, two-thirds of which for General Motors to build electric vehicle battery assembly plants.
Electric vehicle maker Canoo has announced plans to open a plant in northeast Oklahoma next year that is expected to create 2,000 jobs.
But Wisconsin has cut incentives for electronics giant Foxconn. It was supposed to invest $10 billion in it and create 13,000 jobs, but the deal now covers about 1,450 jobs with an investment of $672 million by 2026.
Associated Press reporter Sean Murphy in Oklahoma City, Oklahoma, contributed to this report.
John Hanna, The Associated Press