Honda to Expand U.S. Operation : Japanese Car Maker Slates $450 Million for Ohio Projects
Honda, which established itself as the largest Japanese car company in the United States in 1986, said Thursday that it plans to dramatically increase the local contents of its American-built cars by expanding its operations in Ohio.
In a press conference here Thursday night, Honda said it will spend $450 million to expand its existing engine plant in Anna, Ohio, and add an adjacent plant to produce engines, power trains, and other parts for Honda’s Accord and Civic models now assembled in the company’s complex in nearby Marysville, Ohio. Anna is 45 miles west of Marysville, which is about 30 miles northwest of Columbus.
After the plant expansion is completed in 1990, all of the major components for Honda’s U.S.-built cars will be produced in this country, either by Honda itself or by domestic suppliers, the company said.
Included among the parts Honda will manufacture at Anna will be engines and major engine components, transmissions and clutch cases, drive shafts, brake discs and drums, and front and rear suspension parts. When the Anna complex reaches peak production levels in 1990, it will turn out 360,000 engines and transmissions each year, the company said.
Honda will also build a new iron-casting plant adjacent to the Anna engine facility to handle metal forging and casting for many of its components.
The additional parts production will increase the domestic content in Honda’s U.S.-assembled cars to 66%, up from the current level of 50%, company officials said. Honda’s total investment in U.S. manufacturing operations will also be increased to $1.2 billion.
800 Additional Jobs
The expansion will also add 800 new jobs at the Anna plant, increasing employment at Honda’s U.S. manufacturing operations to 5,000 by 1990.
Honda, which was the first Japanese company to produce cars in the United States, will thus also become the first Japanese firm to do more than just assemble cars here from parts sent from Japan.
Honda’s action comes at a time when Japanese auto makers opening plants here have been coming under heavy criticism from the United Auto Workers union and some leading industry observers for not transferring more parts production from Japan to the United States. In response, Honda Chairman Noboru Okanura said that the company’s additional parts production will mean that Honda’s U.S.-assembled cars will be “truly American products.” In fact, Honda’s target of 66% local content is well above the levels achieved so far by Nissan or Toyota in their U.S. facilities.
Meanwhile, with its American operations expanding so rapidly, Honda said it has decided to move more decision-making authority from Japan to the United States. The company announced that, in March, it will create a new organization, Honda North America Inc. to coordinate all of the corporation’s North American operations.
With a staff of about 30 to be housed at Honda’s existing U.S. sales headquarters in Torrance, Honda North America will be the umbrella organization for Honda’s 11 North American subsidiaries.
Besides producing cars in both the U.S. and Canada, Honda also makes motorcycles and lawn mowers in American plants and is building a new motorcycle plant in Mexico.
