Aquion chooses Sony site for battery plant

Joe Napsha
| Wednesday, Feb. 22, 2012

For the fourth time in four decades, the state has crafted a package of economic incentives to lure a manufacturer to a sprawling Westmoreland County plant most recently occupied by the Sony Corp.

Advanced battery-maker Aquion Energy Inc. announced on Tuesday it intends to lease about 250,000 square feet at the nearly 3-million-square-foot former television assembly plant in East Huntingdon. Officials say the plant will generate about 400 skilled manufacturing and engineering jobs in the next three years.

The company makes batteries using sodium instead of lithium, providing a less expensive method of storing electricity generated by renewable energy sources such as wind and solar power.

In the next few weeks, Aquion, located in the Lawrenceville section of Pittsburgh, expects to complete a long-term lease for the space, which is owned by the Pennsylvania Industrial Development Authority, said Ted Wiley, vice president of business and market development for the company.

Steve Kratz, spokesman for the state Department of Economic and Community Development, declined to offer any details about incentives offered to Aquion.

The company, co-founded in 2008 by Wiley and Carnegie Mellon professor Jay Whitacre, made the announcement even though it has not finalized details with the state, Wiley said.

"We are confident, with the level of support and the nature of the support, that we will get this done. Conceptually, we agreed on the general terms," Wiley said. "We found Pennsylvania to have the best overall incentives."

Aquion narrowed its finalists for the site to Pennsylvania and three other states, Wiley said. An unidentified Asian country was considered, said Wiley, who would not identify the other locations.

"After considering all of our options, including aggressive offers from a number of other U.S. states, we concluded that Southwestern Pennsylvania is the best location for Aquion to establish its first high-volume manufacturing operation," Chief Executive Officer Scott Pearson said.

The firm looked at the quality of the local work force, the proximity to its research and development offices in Lawrenceville and the distance to its customers, Wiley said.

"This is a massive investment" by Aquion, said Donald Smith, president of the Regional Industrial Development Corp. in Pittsburgh, which is marketing the East Huntingdon facility for the state.

The company expects to install manufacturing equipment this year and begin production next year, Wiley said.

In September, Pearson predicted the plant could make tens of thousands of batteries a day, compared to about 60 a day being made on a pilot basis in Lawrenceville. The batteries are about the size of a breadbox.

Aquion, which has about 70 employees, may grow to about 200 workers by next year, Wiley said. The company will be hiring workers with machining skills and basic electrical skills, as well as general laborers. Manufacturing, electrical and mechanical engineers also will be hired.

"This is a real feather in Pennsylvania's cap. They were competing with a lot of other states," said John Skiavo, executive director of the Economic Growth Connection of Westmoreland, a Greensburg-based economic development organization.

"This is wonderful. It's going to bring jobs and new opportunities to Westmoreland County. We've been trying to fill the Sony plant with multiple tenants," said Chuck Anderson, chairman of the Westmoreland County commissioners.

The county added no economic incentives to the state's package, Anderson said.

The East Huntingdon plant has a storied past of economic highs and lows.

The state invested millions of dollars to lure Chrysler Corp. to the site in the late 1960s, but then-Chairman Lee Iacocca pulled the plug before the plant was completed because of a downturn in the auto industry.

The state spent about $100 million in 1976 to convince Volkswagen of America Inc. to use the plant to produce Rabbits and Golfs. About one-half of the investment went to buying the plant from Chrysler, and additional state money was used to build access roads and rail connections. Volkswagen closed the plant in 1988.

In the early 1990s, the state pledged $40 million in grants and low-interest loans to convert the automobile plant into a television-making plant.

Sony's manufacturing operations rose and fell with television sales. Sony announced in 2008 it was pulling the plug on its television assembly operations in the county, shutting down completely in March 2010.

The state has been left with a 2.8-million-square-foot manufacturing facility -- Sony had leased the plant from the state -- that has proved costly to subdivide. Pennsylvania has provided $10 million in funds from the Redevelopment Assistance Capital Program to convert the building into a multi-tenant facility.

To finance the expansion, privately held Aquion is seeking to finalize loan guarantees with the federal Department of Agriculture through the state Agriculture Department, which will enable loans from financial institutions, Wiley said.

Aquion has received financial support from three private investment firms and the U.S. Department of Energy.

Aquion will join three other companies at the former Sony plant. Solar Power Industries Inc., based in Rostraver, leases 265,000 square feet for the production of silicon ingots for solar power products. Dai Nippon Printing IMSA makes thermal transfer ink ribbons for barcodes in 135,000 square feet at the facility. Leeds Inc., a promotion product company based in New Kensington, warehouses products there.

Westmoreland County Community College recently signed an agreement to lease 70,000 square feet for its advanced technology work force training center, which it intends to open in the fall of 2013, said Daniel Obara, college president.

"We're well-positioned to meet the training needs of Aquion," Obara said.

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