Honda Plans Approximately $500 Million in New Construction for North America

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Researched by Industrial Info Resources (Sugar Land, Texas)--Honda Motor Company (NYSE:HMC) is currently planning $500 million of new construction starts in North America as the company begins shifting manufacturing capacity from Japan to the United States.

Honda plans to expand its production capacity in North America by 15-20% within the next two years, as exporting cars manufactured in Japan is becoming increasingly expensive. This is a 40% increase from 2011 production, when the tsunami in Japan disrupted production. The company is making the move as a result of Japan's recent natural disasters and the yen's wide fluctuations compared to the dollar. An increase in production in the United States will result in new job creations and capital spending in the United States by the automaker.

Honda is currently under way with construction of a $98 million expansion of its engine manufacturing plant in Anna, Ohio, with the installation of new heat-treating, grinding and subassembly equipment to prepare for a new component production operation and enable the plant to manufacture 1.18 million V-6 and four-cylinder engines annually. Construction started in the fall of last year and is expected to be completed by the fall of this year. The $98 million expansion will enable the company to continue its strategy to build its next-generation powertrain technologies in Ohio.

Honda is also under way with construction on a $97 million expansion of its Lincoln, Alabama, assembly and engine plant, where the company is constructing a 100,000-square-foot building addition and installing a new quality line to increase production capacity and improve the flexibility of vehicle and engine manufacturing. Goodgame Company Incorporated (Pell City, Alabama) is currently providing general construction services for the expansion. Construction began in the fall of last year and is expected to be completed this fall. Goodgame Company is also working concurrently on a $94 million expansion at the Lincoln plant by constructing a 150,000-square-foot molding plant with the installation of new molding machines and equipment to increase production capacity. This expansion also started construction in the fall of 2011 and will be completed this year. RJ Mechanical Services is providing mechanical services for both expansions.

Honda is anticipating starting construction on an $84 million expansion at the Lincoln plant by expanding the existing stamping plant and installing a new stamping line along with the two existing stamping lines. SSOE Group (Brentwood, Tennessee) is currently providing design services for the proposed expansion. A general contractor is expected to be selected by next month, and construction is anticipated to begin in July of this year. Expansion of the existing stamping area will increase the plant capacity to 340,000 vehicles and engines per year and revamp existing operations.

Honda recently completed a $70 million expansion of a transmission plant in Russell's Point, Ohio, by constructing a 200,000-square-foot building addition and installing a third assembly line to increase the plant's capacity and enable the plant to produce more than 1 million automatic transmissions annually, up from the current 800,000-unit capacity. Two existing assembly lines were relocated into the new manufacturing space. Barton Malow Company (Southfield, Michigan) provided general construction services. The $70 million expansion started in the fall of 2010 and was completed this month. A $50 million expansion of the Russell's Point Die Casting Plant is currently under construction, with the addition of a 75,000-square-foot building for a new die-casting operation and the addition of a third assembly line, as well as the restoration of the plant to full production capacity, which was slowed by an earthquake. Construction on the die-casting expansion started in the fall of 2011 and is expected to be completed by the fall of this year.

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