Honda to Build Assembly Plant in Indiana

GREENSBURG, Ind. -- A $550 million Honda Motor Co. assembly plant will help the Japanese automaker meet a growing North American hunger for its cars and help invigorate a state hit hard by manufacturing job losses, officials and analysts said.

The southeastern Indiana plant _ part of a $1.18 billion global expansion _ eventually will produce 200,000 vehicles annually, increasing Honda's North American production to 1.6 million a year.

In 2005, American Honda sold 1.5 million Honda and Acura cars and light trucks, and the continent accounts for about half Honda's annual global sales, the company said. Honda officials expect its sixth North American plant will help meet that growing demand.

"We believe that the great state of Indiana has what we need to continue that success: an outstanding community of people, excellent transportation systems and the necessary infrastructure to support industry," Koichi Kondo, president of American Honda Motor Co., said during Wednesday's announcement in Greensburg.

Four other states _ Ohio, Michigan, Wisconsin and Illinois _ vied for the plant and its 2,000 jobs after Honda announced in May it would build a plant in the Midwest.

But Indiana, which has lost 98,000 industrial jobs since 2000, persuaded the company to build on 1,700 acres west of Greensburg, midway between Indianapolis and Cincinnati on Interstate 74.

Gov. Mitch Daniels, who returned to Indiana early after an 11-day trade trip to Asia, welcomed Honda officials.

"Honda is going to feel right at home in Indiana, and you are going to love Greensburg and this part of our state," Daniels said.

Indiana offered $141.5 million in incentives to the company, which included tax credits and abatements, training assistance and a promise to expedite the long-sought interchange upgrade at U.S. 421 onto I-74, state officials said.

Many analysts had believed Ohio had the edge for the new plant because of its existing Honda facilities. Honda turns out 680,000 vehicles a year at two Ohio plants. It also has an engine plant and transmissions plant there, as well as 150 supplier locations _ nearly four times as many as Indiana.

Ultimately, that might have worked against Ohio, Gov. Bob Taft said Wednesday.

"The large number of Honda suppliers and plants that already exist in Ohio may have resulted in our being victims of our own success," he said.