Honda Increasing Capacity, Investment and Employment In Alabama

LINCOLN, Ala. – Honda Manufacturing of Alabama (HMA) today announced plans for a 30,000-unit increase in production capacity to 150,000 vehicles and engines per year by late 2002, raising Honda’s investment in the facility to $580 million and employment to approximately 2,300 associates. The announcement came as Honda associates, Alabama elected officials and guests gathered for the dedication of the new plant, which last month began producing the class-leading Odyssey minivan and the V-6 engine that powers it.

“Looking at our customers, demand for Honda products in North America has left our dealers in short supply of models like the Odyssey, so we want to proclaim a new challenge,” said Hiroyuki Yoshino, president and CEO of Honda Motor Co., Ltd., who attended the event. “Already we are renewing the dream here in Alabama. Only with new dreams and new efforts can we continue to meet the needs of our customers.”

With the phrase “Thanks to you, we made it” HMA president Mikio Yoshimi offered individual expressions of gratitude to HMA associates, the construction team, the plant’s suppliers and the citizens of Alabama. “I am thankful for the warm embrace we have received from this community,” he said. “It is this relationship that has sustained us through the challenges we have faced thus far. Now, our continued growth means more people in Alabama will find employment as Honda associates. And it means opportunities for our associates here today to continue growing with the company.”

Among the challenges achieved by Honda’s new associates in Alabama was becoming the first Honda auto plant in the world to assemble vehicles and engines under one roof. To achieve greater efficiency and synchronization in manufacturing, the V-6 engine and Odyssey final assembly lines are located together in the HMA facility.

Honda announced plans to build a $400 million plant in Alabama in May, 1999, based on a mass production start-up in April 2002, with plans to reach the initial minimum employment of 1,500 associates and annual production of 120,000 vehicles and 120,000 engines in late 2002. At the April 2000 groundbreaking, HMA announced it would invest an additional $40 million to add stamping, plastic injection molding and low pressure die-casting operations and that it would accelerate the production start-up to late 2001.

However, achieving the initial 120,000 unit capacity figure will actually result in hiring approximately 1,900 associates – with an initial investment of $540 million due to a number of facility enhancements, higher construction material costs, and the need to accelerate production start-up to meet customer demand. Thus, the $40 million investment announced today to raise capacity to 150,000 engines and vehicles brings Honda’s total investment in HMA to $580 million.

This latest investment will boost Honda’s total North American auto production capacity to 1.21 million units annually by late 2002 when HMA operation reaches its full capacity. HMA also increases Honda’s capital investment in North America to more than $6 billion, North American employment to more than 25,000 associates and brings to eleven the number of major Honda manufacturing plants in North America.

Honda is the world’s preeminent engine-maker, and built more than 11 million engines globally in 2000 for its diverse line-up of automobiles, motorcycles and power products. Honda began operations in North America in 1959 with the establishment of American Honda Motor Co., Inc., Honda’s first overseas subsidiary. Using domestic and globally-sourced parts, Honda began assembling motorcycles in America in 1979, with U.S. automobile manufacturing starting in 1982. Honda designs, manufactures and markets its products in North America and worldwide. Honda currently builds products in 11 manufacturing plants in North America, with three major R&D centers in the U.S.

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