Honda Plans a New U.S. Plant, and Indiana Craves It May 17, 2006
DETROIT, May 16 ? Japan’s Honda Motor Company, on a push to expand its sales of fuel-efficient cars in the United States, said it would spend $400 million to build a sixth North American assembly plant, creating 1,500 jobs.
At a news conference Wednesday morning in Tokyo, Honda President Takeo Fakui said the company would also spend $639 million to build its first new plant in Japan since 1976, and $140 million on an engine plant in Canada.
Further, Honda said it would build a new family-size hybrid electric car that would go on sale in 2009, and hoped to sell 200,000 a year.
Honda did not disclose where it would build the American factory. It has two plants in Ohio, and one each in Ontario, Alabama and Mexico. The plant would make 200,000 vehicles a year, starting in 2008.
But even before its announcement, state officials lined up to vie for the factory, which could create thousands of jobs, both at the plant and at nearby suppliers and businesses.
Gov. Mitch Daniels of Indiana, who has openly courted foreign investment to revive his Rust Belt state, confirmed that the state was actively trying to win the Honda factory. Meanwhile, Ohio officials said they, too, were talking to Honda about expanding its operations there.
Since January, Honda executives have dropped a number of hints that they were looking to expand their presence in North America, which eclipsed Japan several years ago as Honda’s biggest market.
Honda ranks second among Japanese auto companies in American sales, behind Toyota and ahead of Nissan.
The new American plant is expected to build the small Honda Civic, which the automaker already produces in East Liberty, Ohio, and the Fit, a subcompact that Honda sells in Japan and just offered for sale here.
Demand for the Civic has been strong since Honda introduced a new version last fall. Meanwhile, the Fit is reaching the market along with new small fuel-efficient cars from a number of companies, including Toyota, Nissan and Chrysler.
Governor Daniels has seized on foreign investment in an effort to offset job cuts by companies like General Motors and the Delphi Corporation. But he is not alone: the Tennessee Valley Authority, for example, has a number of plant sites ready for development. And Kentucky, where Toyota has a big factory complex in Georgetown, also would like to land another foreign auto plant and could push for the Honda investment.
For its part, Indiana is promoting plant sites in Decatur and Ripley Counties, which sit alongside Interstate 74 in the southeast corner of the state, between Indianapolis and Cincinnati. The Indiana locations would be roughly three hours from Honda’s operations in central Ohio, which include plants in East Liberty and Marysville, Ohio, where it also has a research and development center.
At a news conference in Indianapolis on Tuesday, Gov. Daniels said, “It is an enormously promising opportunity, and we are going to do all we can and are very hopeful.”
Honda’s move comes as Toyota is also looking for places to build at least two new plants ? one to produce vehicles, the other to build engines.
Last month, Toyota officials said they were considering four Southern states for the vehicle factory, although the company also may expand a factory that it is about to open in San Antonio.
Since it disclosed that it might build another plant, Toyota has been deluged with offers from governors in states that were not on its list, meaning the list of finalists may expand, people involved in Toyota’s deliberations said this week.
Toyota is still deciding whether and where it will build the engine plant, which Michigan’s Democratic governor, Jennifer M. Granholm, has vigorously pursued.
The governor, who is making her second visit to Japan in a year, is set to meet with Toyota officials on Wednesday to reiterate her state’s case for the factory.
Governor Daniels will make his own trip to Japan on June 17, although his schedule there has not yet been set, a spokeswoman said.
One drawback to the state’s bid may be that Toyota already has a strong presence in Indiana, where it produces minivans and pickups in Princeton.
In March, Toyota said it would invest in Subaru’s plant in Lafayette, Ind., in order to build an additional 100,000 Camry sedans a year.
- Posted in : Uncategorized, Honda
- Author : arnold
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