Honda Hires as Big Three Crash
As Big Three automakers beg for cash, Honda expands with new factory in Indiana.
Nov. 20, 2008— -- Detroit may be in the doldrums, but Greensburg, Ind., is celebrating its shiny new auto plant.
Honda Motor Co. opened a new factory in the town of 12,000 in October, bringing jobs and hope.
Honda CEO Takeo Fukui flew in from Tokyo for the plant's dedication ceremony Monday, eager to take advantage of the trouble American automakers are in.
"At Honda, we always understand that challenging times ... represent opportunity," Fukui said.
Honda's new plant in Greensburg represents the "other" American auto industry -- the U.S. plants owned by foreign carmakers. Unlike the American "big three" automakers -- GM, Ford and Chrysler -- the foreign-owned companies are not looking for bailouts. Instead, they are expanding to places like Greensburg.
"This is an American-made automobile. Hoosiers make it," said Adam Huening, news editor of the Greensburg Daily News.
More than 900 nonunion employees were hired to work in the plant and expect to turn out 200,000 Honda Civics per year, including some powered by natural gas. The plant, which costs $550 million, will likely grow to employ 2,000 workers.
Unlike the American big three, Japanese automakers are not saddled with enormous costs for retirees. Their younger, mostly nonunion American workers get paid far less.
At Honda, workers receive about $44 an hour, including benefits, while GM employees receive $73.
Despite the difference, workers still raced to apply for openings at the Honda plant. And unlike Detroit, which has seen demand drop for gas-guzzling SUVs, foreign automakers anticipate growing demand for more fuel-efficient cars.
"The Japanese have a much more competitive lineup of small cars," said John Casesa, an automotive analyst. "They're more famous for their small cars. Customers think of them first, and these companies still lead the world in quality, in technology, fuel economy and reliability."
In addition, Honda and other foreign makers have planned well in advance to accommodate a shift in consumer taste.
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