Michigan Waits to Hear Back From Honda

The state has submitted a proposal for a new vehicle assembly plant, but the auto maker likely will pass on the offer if history is any indication.

Christie Schweinsberg, Senior Editor

June 6, 2006

3 Min Read
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DETROIT – Michigan, along with at least three other Midwest states, has submitted a proposal to Honda Motor Co. Ltd. to build its next vehicle assembly plant here, a spokeswoman for Michigan Gov. Jennifer Granholm tells Ward’s.

Now the state is waiting to hear if Honda is interested.

“We hope to have further opportunities to talk with (Honda officials) about our proposal, but I am not aware of any meetings that are scheduled,” the spokeswoman says.

Granholm was in Japan three weeks ago to lure Japanese investment to the state when Honda made the announcement it would open by 2008 a new vehicle assembly plant, with a 200,000-unit annual capacity, somewhere in the Midwest.

While Honda won’t say which states are in the running, officials from Ohio, Indiana and Illinois all confirm their states are being considered by the auto maker.

Noticeably absent in the list is Michigan, which – at 18 – has the most vehicle assembly plants in the country and is home base for the Big Three U.S. auto makers.

“When our economic team was in Japan recently, they requested an opportunity to present Honda with a proposal to locate their manufacturing facility in Michigan, and we had the opportunity (to meet with them),” the governor’s spokeswoman says.

And while Granholm did not join the economic team in meeting with Honda representatives, she did join in discussions with the auto maker during a trip to Japan last summer, the spokeswoman says.

However, if history is any indication, Honda will shun Michigan, a source familiar with the situation tells Ward’s.

“(Honda prefers) to locate where they can be a big fish in a smaller pond, which is why they went to Ohio a number of years ago,” the source says in reference to the auto maker’s two Ohio vehicle assembly plants and large research and development operations.

“I don’t think there’s any real expectation (Michigan’s proposal will) be taken seriously.”

The source, who asked to remain anonymous, also points out that while Toyota Motor Corp. has a sizable and growing research and development facility in Ann Arbor, MI, which is set to employ 1,100 people by 2010, Honda has a “10 or 12 person office in the Detroit metro area.”

A Honda spokesman estimates the auto maker cumulatively employs “under 50” people in Michigan at its Detroit public relations office, an Ann Arbor emissions lab and a Southfield R&D center.

“There are a number of criteria, obviously logistics and whatnot, on which we base our (plant location) decisions,” he says. “I can’t actually confirm or deny whether Michigan is included (in the running for the plant). At this point, all I can say is we are considering a site in the Midwest.”

Even if Michigan does not get the new Honda plant, a spokesman for the Michigan Economic Development Corp. says at least the state’s many suppliers likely will prosper from a relatively close facility.

“If (Honda) is not coming to Michigan, we still are happier to have (the new plant) near Michigan, as opposed to somewhere down South,” he says. “Of the 150 largest (U.S.) auto suppliers, 90 of them are headquartered here. So there clearly is an upside (for) Michigan.”

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