Construction of the Indiana plant begins this fall. The plant was given the code name Project Zoom because of how quickly Honda's site team chose the final site and how fast the automaker wants it built and producing vehicles.
Honda announced its site selection June 28.
The company says it may add a few suppliers to help feed the plant. But the automaker will ask less than a handful of suppliers to set up shop at the plant, Jutte says. Honda considered but rejected a supplier park encompassing the Greensburg factory.
"We looked at it in many ways, and we finally decided that wasn't the direction we were going to go," Jutte says. "We didn't see it as a huge positive -- from a financial standpoint -- impact to our facilities."
Honda also bucked the trend of building an assembly plant in Southern states. From the outset Honda wanted to remain close to its supplier base -- which is mostly in Ohio, Michigan and Indiana -- and to its manufacturing operations in Ohio.
SET Enterprises Inc., an automotive metal-processing company, may be a prime candidate to pick up some Honda work. SET has plants in Ohio, Michigan, Illinois and Indiana. Its Indiana plant is only 20 miles from Greensburg.
SET now is a second-tier supplier to Honda on some products, processing material for Aisin U.S.A. Manufacturing Inc. SET would like to become a Honda Tier 1 supplier or get additional Tier 2 work.
SET and other nearby businesses are concerned about potentially losing good workers to the Honda plant in the sparsely populated community.
Honda's decision to remain in the Midwest comes as no shock, says Steven Szakaly, an economist at the Center for Automotive Research in Ann Arbor, Mich.
"When you look at the issues some other companies have had in hiring people in the South, I don't think it's a surprise at all," he says. "There are some real problems in finding well-qualified individuals to work in these facilities."
Toyota, for example, is screening tens of thousands of people to hire just a few thousand workers, he says. Toyota is building an assembly plant in San Antonio to produce the Tundra full-sized pickup.
The Midwest, and Indiana in particular, has a history of manufacturing and has a large base of graduates from community colleges and technical schools well-equipped to work in industrial jobs, Szakaly says.
"The other major advantage: Transportation costs are so much lower when you already have this agglomeration of your industry in a certain area," he says. "It's pretty expensive to ship stuff down South if most of your suppliers are in the Midwest, especially if diesel prices keep going up."
The Greensburg plant is expected to employ about 2,000 at peak capacity and is designed to accommodate more than one model. It becomes Honda's sixth assembly plant in North America. It is expected to boost North American production capacity from 1.4 million units to more than 1.6 million in 2008.
You may e-mail Ralph Kisiel at [email protected]