Indiana courting Honda for new $400 million plant By The Associated Press May 18, 2006 INDIANAPOLIS - State officials will likely offer Honda Motor Co. tens of millions of dollars in economic incentives to persuade the automaker to build a plant in rural southeastern Indiana. But the deal, which could help revive the state's auto industry, will likely hinge on location, rather than dollars and cents. "I think that the key element is where is the best place for the company," said economist Morton Marcus, former head of Indiana University's Indiana Business Research Center. "They're making a real estate decision, they're making a production decision. All the benefits that we might offer are secondary." Honda officials said Wednesday they plan to build a $400 million plant in the Midwest as part of the company's $1.2 billion global expansion. The company declined to say what states it was considering for the plant, which will be built by 2008, but said it was nearing a final decision. "We'd like to have it sooner rather than later," Larry Jutte, a senior Honda vice president, said during a conference call with reporters. Gov. Mitch Daniels said Tuesday that state officials have been negotiating with Honda, which has pursuing land purchases near Greensburg and Batesville, towns along Interstate 74 about midway between Indianapolis and Cincinnati. Land owners in Decatur and Ripley counties have been approached about selling their property. Ohio, which already has two Honda plants, is also in the running. If Honda chooses Indiana, the plant would help invigorate the state's economy, which has lost 98,000 industrial jobs since 2000. It also would boost Indiana's auto industry, which has long ties to Detroit. Toyota and Subaru already have factories in the state. John Sullivan, director of Purdue University's Center for Advanced Manufacturing, predicted the 1,500-worker plant could bring with it 3,000 related jobs. "It's a huge deal," he said. The plant also would help Honda. The automaker is eager to beef up its output, particularly in North America, which accounts for about half the company's annual global sales. The new plant - Honda's sixth in North America - would boost the company's North American production capacity from 1.4 million to 1.6 million vehicles a year. The automaker hopes the facility, along with a new assembly factory in Japan and an engine plant in Canada, will help it increase annual sales by 34 percent by 2010. Catherine Madden, a senior auto analyst with Global Insight, said Honda needs to add more plants if it hopes to boost production. "They've been capacity constrained," she said. "I think they definitely want to increase their position in this market by the end of the decade." Company lawyers will meet Wednesday with Greensburg Mayor Frank Manus and other local officials. Manus said he would do all he could to attract Honda to the area, but was uncertain about its prospects. "Are they coming to this county, to Ripley County, or where?" Manus told Indianapolis television station WTHR. "We don't know."