Honda Plans Major Expansion in U.S., Canada : Autos: New production goals mean more than 1,000 jobs. Currency values figure in the move.
Honda Motor Co. said Tuesday that it will hire 1,100 workers and invest $310 million to expand its automobile manufacturing, research and development and export activities in North America.
The action gives Honda’s top officials in Torrance more autonomy in decisions affecting the North American market. It also gives those officials control over the development of markets in Central and South America.
“Honda in North America will expand its capabilities to become a self-reliant, globally integrated company,” Koichi Amemiya, president of American Honda Motor Co., told a news conference.
The expansion comes as Japanese auto makers have been hurt by the rise of the yen against the dollar. By moving more manufacturing to North America, Honda can minimize the impact of currency fluctuations.
“It makes a lot of sense for Honda,” said Chris Cedergren, an analyst with Auto Pacific Group, a Santa Ana-based consultant. “Other Japanese manufacturers are following the same plan.”
Honda’s North American expansion is part of a broader reorganization, announced in May, that focuses the company’s operations on four regions: North and South America, Europe and Africa, Asia and the Pacific and Japan.
*
It is the largest investment Honda has made in North America since 1987, when the auto maker decided to build a second assembly plant in Ohio and expand its U.S. research and development efforts.
Honda plans to expand the capacity of assembly plants in Ohio and Canada by 18% to 720,000 vehicles a year. It will also increase the capacity of its Ohio engine factory by 50% to 750,000 units annually.
Most of the expansion will take place at Honda’s East Liberty plant in Ohio, which turns out Civic sedans and coupes. The plant’s capacity will be raised to 230,000 vehicles a year from 150,000.
“This will be done without (enlarging) the physical plant,” said Takeski Yamada, president of Honda’s U.S. manufacturing unit. However, about 400 workers will be added, he said.
Production capacity will be increased by 20,000 vehicles yearly at both the Marysville plant in Ohio and the Alliston facility in Ontario, Canada. Marysville can turn out 360,000 cars annually now; Alliston’s capacity is 100,000.
Honda also plans to increase the capacity of its engine plant in Anna, Ohio, by 50% by 1998. The plant will be able to produce 750,000 engines a year, among them a new V-6 to be produced beginning in 1996. The expansion will cost $200 million and require 200 additional employees.
In research and development, the company will greatly increase its ability to design vehicles for North America and other markets. Its research and development effort is to be expanded to 750 employees from 500 in the next five years.
This will allow the company to develop two Acura models for production in 1996--one for the U.S. and Canadian markets and one solely for Canada. The new Acuras will be the first Japanese luxury cars built in North America.
Honda also plans to step up exports of U.S. and Canadian vehicles to more than 150,000 vehicles a year, including components sent to other countries for assembly. The company said it expects to export about 75,000 vehicles, excluding the component kits, to 35 countries this year.
*
Cedergren said that with Honda’s partnership with British-based Rover Group (acquired by BMW earlier this year) coming to an end, the Japanese auto maker is looking to export cars from North America to Europe and South America. With the Rover link dissolving, he said, Honda will not be building an assembly plant in Europe.
“They will leverage what they have in North America,” he said. “That means exporting to Europe and South America.”
