It’s Official Now! – Honda Selects Indiana for Sixth Assembly Plant

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Researched by Industrial Info Resources (Sugar Land, Texas). On Wednesday, July 28, Honda Motor Company, Limited (NYSE:HMC) (Torrance, California; Tokyo, Japan) called a press conference to announce its much-anticipated decision to build a sixth automotive assembly plant in Greensburg, Indiana, which is expected to employ 2,000 workers. For months, the company had mulled over the difficult decision, and had managed to narrow the field down earlier this month to sites in Greensburg, Indiana; Van Wert, Ohio; Octa, Ohio, and, at the last minute, Fithian, Illinois. The Greensburg plant will be Honda’s sixth assembly plant in North America, bringing its North American plant total to fourteen. The 1,656-acre site is bounded on the east by Old US 421, on the west by Vandalia Road, on the north between County Road 300 North and County Road 400, and on the south by Muddy Fork River.

The Van Wert site, largest of the four at 1,792 acres, was perhaps the best site, logistically speaking, because of its proximity to Honda’s suppliers and its other Ohio assembly plants. One factor Honda considered most vital was not putting its many suppliers in Ohio in jeopardy of losing their trained employees, who might prefer the possibility of higher wages offered at the new assembly plant. Some of Van Wert’s suppliers include Eaton Corporation, Federal Mogul Corporation, Teleflex, Incorporated, Toledo Molding & Die, Incorporated, and ThyssenKrupp Budd.

Greensburg, in southeastern Indiana, offers a much larger labor pool from the extended area around it (Indianapolis and Cincinnati areas), and it isn’t so much further from Honda’s suppliers in Ohio and other Midwest states than the Van Wert site would have been. And the Greensburg site, at 1,656 acres, is not much smaller than the one in Van Wert, and still well within Honda’s ideal size range. Some of Greensburg’s present suppliers are Advanced Bearing Materials (a joint venture of Kolbenschmidt Pierburg North America’s KS Bearings and Miba AG of Austria), and Valeo Engine Cooling. Conveniently nearby is Mittal Steel, in Burns Harbor, Indiana (formerly ISG and, before that, Bethlehem Steel), an integrated steel mill supplying the automotive industry.

The choice of Greensburg is Indiana’s second windfall this year. In March, Toyota had announced plans to invest $230 million to add a line that would produce 100,000 Camrys a year at Subaru’s (Fuji Heavy Industries) assembly plant in Lafayette, which would add another 1,000 new jobs for the job-loss beleaguered state.

Honda will invest $550 million to produce 200,000 vehicles a year, most probably the Honda Civic and Fit subcompacts, using a 4-cylinder engine made at Honda’s Anna Engine Plant in Anna, Ohio, which will undergo its own $75 million upgrade. Honda is also developing a totally new, clean V-6 diesel engine for Honda and Acura medium-sized vehicles, and plans to market a newly designed, cleaner 4-cylinder diesel engine in the next three years. The company also plans to add a dedicated hybrid vehicle in 2009, a smaller family car, priced less than the current Civic Hybrid.

Honda’s astounding $1.3 billion expansion plan, announced earlier this month, is expected to raise Honda’s total North American output to 1.66 million vehicles a year (but still a little short of its expected North American sales of over two million vehicles for 2008) and has outlined expansions and/or upgrades of several of its plants.

Besides the construction of a new plant, the company will construct a new $140 million engine plant in Alliston, Ontario, where it already has two assembly plants, as well as upgrade to its Anna Engine Plant, and a $50 million expansion at its just recently-opened $100 million Tallapoosa (Georgia) Engine Plant. In July 2006, Honda will complete a $2 million expansion at its East Liberty, Ohio assembly plant.

The company is also undertaking a $64 million expansion at its assembly plant in El Salto (Jalisco), Mexico, which is scheduled to begin in August 2006 and be complete by December 2007. This month, Honda is completing a $100 million expansion of its Russells Point (Ohio) transmission plant, and in July a $70 million expansion at its Lincoln (Alabama) assembly and engine plant should be complete.

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