Honda plans to build jets in North Carolina

Honda Motor Co., expanding into aviation from automobiles, motorcycles and engines, said Friday that it would spend $60 million for a North Carolina headquarters and factory for its new aircraft unit.

Honda Aircraft Co. will begin producing small planes for delivery by 2010 and employ at least 300 people, spokesman Jeffrey Smith told reporters in Greensboro, N.C.

Honda’s entry into aircraft manufacturing sets up a competition with Textron Inc.’s Cessna Aircraft unit in Wichita, Kan., the world’s biggest maker of business jets.

Tokyo-based Honda last year received more than 100 orders for its $3.65-million HondaJet, which can carry as many as eight people.

The $60 million that Honda plans to spend on its aircraft factory “isn’t significant. That’s just capital investment,” said Bob Zuskin, an analyst at Herndon, Va.-based GRA Aviation Specialists. “The real cost is getting the plane certified for sale. That can run to $1 billion with all the certification and engineering costs.”

Annual production will exceed the company’s initial goal of 70 planes a year, said Michimasa Fujino, chief executive of the new unit and HondaJet’s designer. Fujino declined to give a new production target for the plane, which has two Honda-designed engines mounted over the wings.

Honda Aircraft will be housed in a 215,000-square-foot facility, including a 68,000-square-foot hangar at Piedmont Triad International Airport. Honda will spend $40 million for the buildings and $20 million in design and production equipment.

“We are expecting additional investment,” Fujino said.

The company is readying 20 HondaJets for test flights late next year to receive Federal Aviation Administration certification, Fujino said.