Honda hosts groundbreaking ceremony for new assembly plant in Indiana town

Honda Motor Corp. was hosting a ceremonial groundbreaking Monday at its new $550 million (EUR413.44 million) vehicle assembly plant in southeastern Indiana.

Photo: Honda hosts groundbreaking ceremony for new assembly plant in Indiana town

The Japanese automaker is building a plant that will employ about 2,000 people when it opens in Fall 2008. Honda announced the factory site last year, and earth movers started reshaping the area in October.

Earlier this month, a Honda supplier announced that it will build a $32 million (EUR24 million) factory north of Greensburg, outside New Castle, to make car seats for the plant.

The factory - part of an $1.18 billion (EUR890 million) global expansion - eventually will produce 200,000 vehicles annually, increasing Honda's North American production to 1.6 million vehicles a year.

The jobs that pay an average of $24 (EUR18) an hour should provide an economic boost to the region. Economists estimate that each new Honda job could result in six others that will serve the plant and its workers.

Honda will not discuss which models will be made at the plant.

In 2005, American Honda sold 1.5 million Honda and Acura cars and light trucks, and the continent accounts for about half of Honda's annual global sales, the company said.

Four other states - Ohio, Michigan, Wisconsin and Illinois - vied for the plant and its jobs after Honda announced last May it would build a plant in the Midwest, reports AP.

But Indiana, which has lost 98,000 industrial jobs since 2000, persuaded the company to build the plant west of Greensburg, a community of 10,500 people about 50 miles (80 kilometers) southeast of Indianapolis.