Honda Plans to Expand U.S. Plants

Honda’s startling success in the American market has been due, in large measure, to its early gamble on U.S. production, and Honda executives know it. Without a supply of domestic cars unrestricted by quotas, Honda could never have overtaken Toyota in the U.S. market.

So now, Honda officials are dramatically expanding the company’s Ohio production complex, hoping to build on their earlier success.

Honda began manufacturing operations in the United States in 1979, when it started building motorcycles at a $35-million plant in Marysville, Ohio, just north of Columbus. The cycle plant now employs about 400 workers building 60,000 cycles a year for both domestic and export markets.

In December, 1980--just a few months before import quotas on Japanese cars went into effect in April, 1981--the company broke ground on a $250-million auto assembly plant adjacent to the motorcycle facility. And in November, 1982, Honda became the first Japanese company to build cars in the United States when it started producing Accord compacts in Marysville.

The auto plant now employs about 2,000 workers building 150,000 Accords annually for Honda’s dealers east of the Mississippi River. (All of Honda’s U.S. workers are still non-union, despite a long organizing campaign by the United Auto Workers.)

Expansion Project

This spring, Honda is in the midst of a $240-million expansion project designed to double the production capacity at its Marysville plant, which by 1988 will be producing 150,000 Accords and another 150,000 Civic subcompacts annually. Like the U.S.-built Accord, the Marysville Civic will only be available east of the Mississippi. Meanwhile, Honda is about to build another Marysville plant to produce automotive plastic parts for use in the assembly plant in Marysville as well as in a smaller assembly operation being built in Canada. Another parts plant has been opened nearby by Bellmar Parts, a joint venture of Honda and a Japanese auto supply firm, to provide seats, exhaust systems and brake lines for the Accord line. And Honda is also expanding its Marysville stamping operations in order to supply outer body parts to both the Civic and Accord assembly lines.

In Anna, Ohio, 40 miles from Marysville, Honda is also building a new motorcycle engine plant to supply the motorcycle assembly operations in Marysville, and company officials say Honda is likely to announce plans to expand that facility shortly after it opens to add automotive engine production.

When Honda’s current expansion project is complete, it will have about 3,000 workers in Marysville and another 100 in Anna. Honda’s U.S.-built Accords now have about 50% domestic content, and that figure could rise to 55% if the company begins U.S. engine production, according to Shoichiro Irimajiri, president of Honda of America Manufacturing, the Honda subsidiary that runs the Ohio manufacturing operations.

Irimajiri also says the company has no plans to further expand its production capacity in Japan, and so might add the assembly of other car lines to the Marysville operations over the next few years, as the demand for those products increases. He said Honda is looking at whether it should eventually begin Marysville production of the Prelude compact, the Civic CRX, or one of the new models that will be sold under its Acura nameplate beginning in 1986.

“We have some chance to build other models here, like one of the Acura cars, as early as 1987,” Irimajiri says.