Temple of VTEC Rumors and News - Honda to Build New Automobile Manufacturing Plant in Indiana

$550 Million Plant to Employ 2,000 Associates and Begin Production in 2008

GREENSBURG, Ind. 06/28/2006 -- Honda today announced plans to build a $550 million automobile plant on a 1,700-acre tract in Decatur County, Indiana, near Greensburg, 50 miles southeast of Indianapolis. The plant will begin mass production of fuel efficient 4-cylinder vehicles in fall 2008, with an annual production capacity of 200,000 vehicles and employment of 2,000 associates.

The new Indiana plant, Honda's sixth auto plant and 14th major plant overall in North America, will help boost Honda's total North American auto production capacity from 1.4 million units to more than 1.6 million units in 2008, grow Honda's employment in North America to more than 37,000 associates and increase North American capital investment to more than $9 billion.1

"Honda's success in America has been based on our strong commitment to our customers," said Koichi Kondo, president of American Honda Motor Co., Inc., and chief operating officer of Honda's North America Region operations. "We believe the great state of Indiana has what we need to continue this success -- an outstanding community of people, excellent transportation systems, and the necessary infrastructure to support industry. It is an ideal location in the Midwest both for our network of parts suppliers and as a central location for all of our customers across the country."

In 2005, American Honda achieved record U.S. sales of 1,462,472 new Honda and Acura cars and light trucks, the ninth straight year of record annual sales. In order to meet growing demand, Honda plans to build the new Indiana plant in approximately 24 months, with construction expected to begin in fall 2006.

Honda will announce additional details of its vehicle production plans at a later date. The new plant will have the same type of flexible New Manufacturing System that is found in Honda's other auto plants in the U.S. and Canada, with advanced technologies that provide the flexibility to produce different models more quickly and efficiently. Major processes performed at the Indiana plant will include stamping, welding, painting, plastic injection molding and assembly operations. Hiring plans will be announced in the coming months.

Honda will make a significant commitment to limit the environmental impact of the new Indiana plant. Already, every major Honda plant in North America has met the ISO 14001 international environmental management standards except the new transmission plant in Georgia that opened in May 2006, which is now working toward certification. The Indiana plant will employ advanced methods of energy and emission reduction with the goal to become a "zero waste to landfill" factory.

"Our commitment to the environment is not based just on regulations or testing standards," said Akio Hamada, president of Honda of America Mfg. Inc., and head of Honda's manufacturing operations in the North America Region. "Our goal is that this plant in Indiana will have the smallest environmental footprint of any Honda auto plant in North America."

As part of an infrastructure improvement package developed in cooperation with local and state government officials, the state of Indiana and the community will make various highway improvements in the area, provide site and infrastructure improvements and funds to train new Honda associates.
The Anna, Ohio Engine Plant, Honda's largest engine facility in the world, will provide 4-cylinder engines to the Indiana plant. With annual capacity of 1.15 million engines, the Anna Plant has the flexibility to produce both 4-cylinder and V6 engines, as well as numerous engine and brake components.

Honda first announced its plan to build a new auto plant as part of its May 17 announcement for the advancement of the company's "2010 Vision" for North American automobile operations. In addition to the new auto plant in Indiana, Honda's North American plan also included the following new corporate initiatives:

Construction of a new engine plant in Canada to begin production of 4-cylinder engines in 2008 with an investment of $140 million and employment of 340 associates.
Expansion of U.S. engine, transmission and powertrain component production in Ohio and Georgia, with additional investment of $125 million and additional employment of 80 associates.
Introduction in the U.S. and Canada in 2009 of a new, more affordable, dedicated hybrid car.
Introduction in the U.S. and Canada within the next three years of new 4-cylinder diesel engine technology that meets U.S. EPA Tier 2 Bin 5 emissions standards.
Establishment of a voluntary goal to improve American Honda's Corporate Average Fuel Economy (CAFE) by five percent over 2005 levels by the year 2010.

Honda began operations in the U.S. in 1959 with the establishment of American Honda Motor Co., Inc., Honda's first overseas subsidiary. Honda began U.S. production operations in 1979. Prior to today's announcement, Honda had invested more than $8.5 billion in its North American operations with 13 major manufacturing plants, employment of more than 33,000 associates and the annual purchase of more than $16 billion in parts and materials from suppliers in North America. Nearly 8 of 10 Honda and Acura cars and light trucks sold in America are produced in North America.