GREENSBURG, Ind. – Honda Motor Co. (HMC) will build a $550 million auto assembly plant near Greensburg, Ind., as part of a $1.18 billion global expansion, company officials said Wednesday, ending a five-state scramble and bringing jobs to a state hit hard by manufacturing losses.
The factory will employ 2,000 workers and eventually produce 200,000 vehicles annually, officials said at a news conference.
The Japanese automaker announced in May that it planned to build its sixth North American plant in the Midwest, but did not say where. Officials from Ohio, Indiana, Michigan, Illinois and Wisconsin promoted sites in their states.
"We believe that the great state of Indiana has what we need to continue ... success: an outstanding community of people, excellent transportation systems and the necessary infrastructure to support industry," said Koichi Kondo, president of American Honda Motor Co.
He said he has been to Indianapolis many times as all drivers in this year's Indianapolis 500 used Honda engines.
"I'd like to point out that there was not one engine failure in the race," Kondo said. "With the racing spirit in mind, today I am happy to be able to say, 'Honda and Indiana, start your engines.'"
Indiana state Rep. Cleo Duncan, R-Greensburg, called the announcement "monumental."
"It will transform the entire region of the state."
Gov. Mitch Daniels, who returned to Indiana early after a 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.
The plant will help invigorate the state's economy, which has lost 98,000 industrial jobs since 2000.
Construction will be completed in 2008. Kondo declined to say which vehicles would be produced, although the cars would be four-cylinder models. The Anna, Ohio, plant will provide the engines, Honda said.
The Greensburg plant will boost the Japanese automaker's North American production capacity from 1.4 million to 1.6 million vehicles a year. The company will soon employ 37,000 people in North America, it said.
Some community members also welcomed the news.
At Christy's Cakes and Confections, owner Christy Kinker, 30, displayed a hand-drawn sign in the window that read, "Welcome Honda."
"We're just excited about the business," the Decatur County native said. "We hope it will help the small mom and pop businesses and bring more money to the area. We've lost so many jobs here. It seems like as a community we've been down in the dumps. I think this will rejuvenate everybody."
Honda and its larger Japanese rival, Toyota Motor Corp. (TM), have been racheting up their North American manufacturing capacity to keep up with demand, even as U.S. automakers General Motors Corp. (GM) and Ford Motor Co. (F) are cutting thousands of jobs and closing plants as their market share declines. North America accounts for about half Honda's annual global sales.
Planning officials in Decatur County were to meet Wednesday to discuss rezoning 1,700 acres west of the city for the plant.
Honda this spring collected options on land near Greensburg, a community of 10,500 people 50 miles southeast of Indianapolis, offering to buy property at 75 percent more than its assessed value. The deal included a $6,000 signing bonus to landowners who agreed to sell, regardless of whether the land was used.
Community leaders had 300 people recently pose in the shape of the Honda logo as part of a campaign to demonstrate that residents welcome the plant — and the jobs.