By JEFF BENNETT
Johnson Controls Inc. will begin producing lithium-ion hybrid battery cells in Michigan next year after winning $148.5 million in state tax incentives.
The company, partnering with France's Saft Groupe , said it will spend $220 million to renovate a Johnson plant in Holland, Mich., to produce the batteries. Production should start next year with an initial output capacity of 15 million lithium-ion cells.
Batteries made by the venture will likely be used to power a Ford Motor Co. plug-in vehicle slated to hit showrooms in 2010. Ford has selected the Johnson Controls-Saft partnership as its battery supplier.
Johnson Controls' announcement, coupled with the tax credits, comes at a time when Michigan is struggling to stop the erosion of its manufacturing base and auto makers are attempting to offer electric or additional hybrid vehicles that use less gas and have lower emissions.
Other companies receiving tax credits Tuesday included LG Chem-Compact Power for a planned $200 million facility. The company produces cells for batteries used in General Motors Corp.'s Chevrolet Volt, which is to go into mass production in 2010.
Additionally, A123Systems Inc. is planning to build a facility in Livonia, Mich., to supply Chrysler LLC, and KD Advanced Battery Group LLC, a joint venture with Dow Chemical Co., plans to build a plant in Midland, Mich., to make batteries for use in electric cars or hybrid vehicles.
About 500 jobs will be created by the Johnson Controls-Saft plant, said Johnson Controls Power Solutions President Alex Molinaroli.
Johnson Controls' shares closed at $16.17, up 1.1%, in 4 p.m. composite New York Stock Exchange trading.