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Honda Ala. plant opens for business

Honda Manufacturing of Alabama L.L.C.
  • Location: Lincoln, Ala.

  • Product: Honda Odyssey

  • Capacity: 120,000 minivans, 120,000 engines

  • Construction start: April 2000

  • Job 1: Nov. 14

  • With its new minivan plant in Lincoln, Ala., American Honda Motor Co. Inc. faces a question: how to allocate all the new capacity.

    The plant, which started commercial production Wednesday, Nov. 14, will give the company 120,000 Odysseys annually when it reaches full speed. Another Honda Motor Co. plant in Alliston, Ontario, also is producing 140,000 Odysseys a year.

    Retailers have been hot for more Odysseys for the past two years. In fact, when officials broke ground for the Lincoln factory in April 2000, they shortened the plant's construction schedule by six months to bring the Odyssey capacity to market faster.

    American Honda has been struggling to build an inventory of the vehicles. Retailers say the model's volume increases one month and declines the next because there are not enough Odysseys in the pipeline. On Nov. 1, there was a 20-days supply of all domestically built Honda trucks, but the company says the supply of the Odyssey is lower.

    The situation should change now that the $440 million Alabama plant is open. Last month, the Canadian plant built more than 14,000 of the minivans, at the same time that U.S. retailers sold 9,441.

    But observers believe Honda has no intention of leaving all of the new capacity allocated to the Odyssey. The company showed dealers a new Honda sport-utility that will replace the Passport. That vehicle will be built off the Odyssey platform, which also yields the Canadian-built Acura MDX.

    Alliston has been running two Saturdays a month in overtime production to keep up with Odyssey and MDX demand. The company is projecting about 40,000 units of MDX production this year.

    As the Alabama plant ramps up, the Canadian plant expects to shift more of its capacity to sport-utility production. When the Honda version goes into production in 2002 or early 2003, it probably will go into the Alliston plant, meaning that even more Odyssey capacity will have to be shifted to Alabama.

    In the longer term, Honda says it still is considering other vehicles for the Alabama plant.

    You can reach Lindsay Chappell at lchappell@crain.com

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