Honda plant bound for 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 yesterday.

The southeastern Indiana plant -- part of a $1.18 billion global expansion -- 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.

Four other states -- Ohio, Michigan, Wisconsin, and Illinois -- vied for the plant and its 2,000 jobs after Honda said 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.

Governor Mitch Daniels, who returned to Indiana early yesterday from a trade trip to Asia, welcomed Honda .

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 suppliers -- nearly four times as many as Indiana.

The company also has one plant each in Alabama, Canada and Mexico.