Lower dollar driving parts manufacturing to America....
from Automotive News
ATLANTA -- Honda Motor Co. will move some gear manufacturing from Japan to Ohio and build a transmission factory in western Georgia.
Announcing the plan in Atlanta on Tuesday, company officials said Honda will spend $270 million to bring the production of various engine components closer to their finished vehicles in North America.
Honda will spend $100 million to launch high precision gear manufacturing in the United States for the first time at its transmission plant in Russells Point, Ohio.
That business unit, Honda Transmission Manufacturing of America Inc., will in turn give up its production of automatic transmissions for the Odyssey minivans and Pilot SUVs that are assembled in Lincoln, Ala.
Those transmissions will be built in a new plant in Tallapoosa, Ga.
Honda will spend an additional $100 million to build that plant. Tallapoosa is about 60 miles from the Lincoln plant.
Honda will also spend another $70 million to introduce component machining operations at the Lincoln plant, which has capacity for 300,000 vehicles each year.
The shuffle will be completed in fall 2006.
Koichi Kondo, COO of Honda's North American Regional Operations, said the moves are part of Honda's "effort to build our production close to our customers."
In recent years, Honda has begun building its vehicle factories with on-site engine plants. The Ohio transmission plant was opened in 1996, before Honda embraced that strategy, and before the automaker considered building an assembly plant in Alabama.
The new three-part plan will require Honda to add about 600 workers in three states - 400 in Georgia, and 100 each in Russells Point and Lincoln.
Kondo said the company's total North American production capacity for automatic transmissions will not increase with the addition of the new factory. The company currently has the capacity to produce about 1 million automatic transmissions a year in North America.
Company officials repeatedly referred to the Georgia transmission plant as an "initial investment." Georgia Gov. Sonny Perdue said that Honda has "a potential to double" its investment at Tallapoosa in the future.