Oct. 13--Smith Electric Vehicles has begun limited assembly operations locally, but economic development officials expect a major struggle next year to keep the British import here for the long haul.

The first 14 employees are working at a temporary facility at Kansas City International Airport, with 40 expected to be on the payroll by the end of the year, said Jeff Kaczmarek, president and CEO of the Kansas City Economic Development Corp. A limited number of the battery-powered delivery vans are expected to be assembled this month.

The big question, however, is whether Kansas City will be able to hold onto Smith Electric should the orders begin in earnest and the company move forward with building a full-scale plant.

Smith Electric signed only a one-year lease last summer on the 80,000-square-foot former aircraft maintenance building, with an initial investment estimated at $5 million.

"Smith Electric Vehicles is being heavily courted by a variety of other communities for their permanent facility," Kaczmarek said Monday. "We have a toehold, but we're in fierce competition with other states, and we have to aggressively move on a variety of fronts."

Bryan Hansel, CEO of Smith Electric, could not be reached for comment.

The company is a British-American consortium that wants to bring a battery-powered vehicle technology long used in Europe to the U.S. market. Its first delivery vehicle assembled in Kansas City, the Smith Newton, runs on lithium-ion batteries and can go 100 miles between rechargings.

It also plans to team with Ford Motor Co. on a smaller electric delivery van, the Ford Transit Connect.

The federal government made a $10 million grant to Smith Electric in August, and several companies, including Frito-Lay, Kansas City Power & Light and Pacific Gas & Electric, have ordered test vehicles.

"We don't want to take Smith Electric for granted," Kaczmarek said. "We can't be complacent and assume just because they have a preliminary facility here we have a lock."

A meeting is planned this week between city and state development officials and representatives of the Kansas City Area Development Council to map a strategy.Complicating Kansas City's quest for Smith Electric, Kaczmarek said, could be a new deal between Kokam America and Dow Chemical Co. Smith Electric officials have said their long-term stay here depended in part on whether Kokam moved forward with its proposed $650 million battery plant in Lee's Summit.

Although Missouri has approved tax credits for that project, Kokam is awaiting a decision from the federal government on additional financial assistance. The proposed Lee's Summit plan would employ 900 people manufacturing vehicle-sized batteries.

Don Nissanka, CEO of Kokam, said his firm closed a deal earlier this month with Dow Chemical to jointly develop vehicle battery plants. The venture is called Dow Kokam, and the Nissanka said Dow's deep pockets should help his firm "scale up" to build the manufacturing facilities required should the electric vehicle market take off in the United States.

In the meantime, Nissanka said his company's application to the U.S. Department of Energy for additional funding is in good shape and a decision is expected by the end of this month.

To reach Kevin Collison, call 816-234-4289 or send e-mail to kcollison@kcstar.com.

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