March 29, 2011

State of Alabama
Press Release: Alabama Department of Commerce

Alabama Honda Plant Plans $94 Million Expansion

Honda plant shot.JPG
The Honda plant in Lincoln is expanding, with plans to create 20 new jobs at the Lincoln facility.
Honda is expanding its Alabama auto factory, with plans to invest $94 million and create 20 new jobs at the facility in Lincoln.
The Talladega County Commission on Monday night approved tax abatements for the project, which is expected to be complete by mid-2012.

Although Honda did not pinpoint the reason behind the expansion, sales of the Odyssey minivan and Pilot SUV, both built in Lincoln, have been rising amid an overall recovery in the global auto industry.

The Japanese automaker, which now employs more than 4,000 people at the $1.5 billion plant, also did not specify much about the project itself, but said the work will include installing new equipment.

The project will increase production capacity and improve the flexibility of vehicle and engine manufacturing, said Mark Morrison, a spokesman for the Lincoln plant.

Since the March 11 earthquake and tsunami in Japan, automakers based there have been scrambling to secure the supply line for parts made in that country.

On Friday, Honda said it expects production schedules to be interrupted across its North American operations, including the Alabama plant, due to a lack of critical parts. The company has not said how much production time will be lost in Lincoln.

But the plant's expansion project is a separate issue, said Steve Sewell, executive vice president of the Economic Development Partnership of Alabama.

"The crisis that Honda globally is dealing with now is a crisis that they have to manage in the short term," he said.  The expansion "is really an example of their long-term planning for that operation."

The new investment and jobs at the plant also are evidence of continued recovery in Alabama's auto industry, which slashed output in 2008 and 2009 amid a global auto sales slump.

"It's good news any time we see a major employer in the state making an investment in their operation," Sewell said. "For us, that just underscores the importance of the plant to Honda globally."

Gov. Robert Bentley said he was pleased with the automaker's plans.  "For the past 10 years Honda has played an important role in the Alabama economy," the governor said in a statement to The Birmingham News. "We are so pleased the company will invest even more in our state to expand and create even more well-paying jobs for Alabamians."

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