$30.7M to fund Exide plant revamp

FORT SMITH -- Battery maker Exide Technologies is expanding and updating its Fort Smith plant with the help of a $30.7 million cost-sharing grant from the federal government.

As part of the Title III Technology Investment Agreement, the federal government will pay $18.7 million and Exide $12 million toward a variety of enhancements at the plant aimed at automating and improving battery production. The plant makes a wide variety of batteries, including those used in Navy nuclear submarines.

Named Project Neptune, construction on a 12,000-square-foot expansion of the 236,000-square-foot plant is expected to begin soon, with total plant improvements and upgrades completed by 2021. While the plant upgrades will provide enhancements for battery systems on nuclear submarines, they also will have applications for commercial batteries.

Exide has operated its Fort Smith plant for 40 years. It employs 153 hourly workers and 37 salaried employees. Exide, based in Milton, Ga., operates in 80 countries and sells its batteries in the transportation and industrial markets.

Kevin Settle, process-improvement engineering lead manager with Exide, said the expansion and improvements in Fort Smith will create between five and seven jobs initially, but they will be high-paid positions. He said as things progress at the plant, more jobs will be added. He noted the typical employee at the Fort Smith plant earns more than $20 an hour.

Vic Koelsch, president and CEO of Exide, told a group gathered at a groundbreaking Tuesday, the company has been working to obtain the investment agreement for three years. He said Exide has faced its challenges recently but as it moves forward, it will look back at events like the revamping of the Fort Smith plant as significant turning points.

In June 2013, the 127-year-old company filed for Chapter 11 protection with $1.9 billion in assets and $1.1 billion in debt. The move included only the company's U.S. operations.

At the time, Exide said operational challenges, including the loss of Wal-Mart Stores Inc.'s automotive-battery business and the high price of scrap lead used in battery making, were key factors in the restructuring. Just before the filing, the California Department of Toxic Substances Control closed Exide's lead-acid battery recycling plant in Vernon, Calif., saying it failed to meet state health standards.

In March 2015, the company agreed to close permanently the Vernon plant under the terms of a nonprosecution agreement with the U.S. attorney's office for the Central District of California, resolving the office's criminal investigation into Exide. The agreement includes a deal with the Toxic Substances Control Department to clean up the site.

Exide emerged from Chapter 11 as a private company in April 2015, dropping about $600 million in debt. Koelsch was named president and CEO in June 2015.

Lt. Gov. Tim Griffin told the crowd Tuesday that Arkansas and Fort Smith were gaining a national reputation in the defense sectors primarily on the strength of the quality of the state's workers.

"This is a beginning," he said.

Fort Smith Mayor Sandy Sanders said the Exide expansion is another victory for the city on the economic front.

About a year ago furniture retailer FFO Home moved its corporate offices, manufacturing and distribution operations to Fort Smith. In March, the long vacant Mitsubishi Power Systems building in Chaffee Crossing became the home of P.H. Glatfelter Co., a global manufacturer of specialty papers and fiber-based engineered materials.

Preliminary data from the U.S. Department of Labor on the Fort Smith Metropolitan Statistical Area -- which covers Sebastian, Crawford and Franklin counties in Arkansas and LeFlore and Sequoyah counties in Oklahoma -- for April show unemployment at 4.1 percent, down from 5.5 percent for the same period in 2015. The statewide preliminary unemployment rate for May was 3.8 percent, down from 5.4 percent for the same period last year

Fort Smith's labor force in April stood at 121,657, up from 121,434 for the same month in 2015 but still far below the decade high of 129,983 in 2007, before the recession hit in 2008 and the region's labor force began to decline.

The project qualifies for state two incentives -- InvestARK, a sales and use tax credit program for those that invest $5 million or more in a single plant, new construction equipment, expansion or modernization; and Advantage Arkansas that gives a tax credit based on payroll of new jobs as result of the Exide project.

Business on 06/29/2016

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