Honda to Build $500m Indiana Plant

Honda today announced plans to build a $550 million automobile plant on a 1,700-acre tract in Decatur County, Indiana, near Greensburg, 50 miles southeast of Indianapolis. The plant will begin mass production of fuel efficient 4-cylinder vehicles in fall 2008, with an annual production capacity of 200,000 vehicles and employment of 2,000 associates.

Read "Honda Confirms $500M Plant in Ind." @ The Car Connection

This reads like a press release from Honda. Missing from the article is the fact that Indiana is kicking in $40 million in incentives to Honda, another $45 million on infrastructure improvements, and $55 million in road improvements not "directly" related to Honda. This is all appeared in the Business section of the Toronto Star today.

Of course, it will be pointed out that the hundreds of millions in spin off jobs are worth it, but aren't we really pitting Indiana against Michigan? If it costs Indiana $100 million or so to buy these jobs while 30,000 jobs are being lost at GM - how is this benefiting America?

I am not an economist, but it isn't rocket science to see that every plant that Japan Inc opens is another nail in the coffin of GM and Ford.

The irony of it all is that American taxpayers are footing the bill!

Am I crazy? Why aren't more people concerned about this? Are we so short sighted that we will whore out our neighbor just so we can save a few bucks or drive a fancier car?

Can't blame the state - other states were competing for it. Also, factories aren't where the money's made (though often a poorly run factory is where the money is lost). The product makes the profit.

My wonderful stepfather suggested I move down there tho work.

Umm, I don't think so.

If I go anywhere and work in a plant, it'll be an American one. I'll be the scab worker. Hehe.

Well, the big forwign companies just say 'we are thinking of..' and states fight for the work. Giving away taxpayers $$$.

But then at election time the politco can say "I got us a plant".

Can't blame it on the Big 3, it's with any industry looking for work.

Even in Show Biz, states are offering $$ to get movies shot there.

Well, the big forwign companies just say 'we are thinking of..' and states fight for the work. Giving away taxpayers $$$.

But then at election time the politco can say "I got us a plant".

Can't blame it on the Big 3, it's with any industry looking for work.

Even in Show Biz, states are offering $$ to get movies shot there.

Don't blame it on "the big forwign [sic] companies," because it happens at Ford and GM as well. And when election time comes up, in many cases the "politico" who got the plant gets voted out...it's happened to many governors. Sometimes people are less short-sighted than we give them credit.

This reads like a press release from Honda.  Missing from the article is the fact that Indiana is kicking in $40 million in incentives to Honda, another $45 million on infrastructure improvements, and $55 million in road improvements not "directly" related to Honda.  This is all appeared in the Business section of the Toronto Star today.

Of course, it will be pointed out that the hundreds of millions in spin off jobs are worth it, but aren't we really pitting Indiana against Michigan?  If it costs Indiana $100 million or so to buy these jobs while 30,000 jobs are being lost at GM - how is this benefiting America?

Since your University Education lacked any studies on the US Constitution, I will take two minutes and give you a quick study. There is 1 Federal Government that for the most part is responsible for regulating interstate commerce and the supply of money where 50 individual states directs its own government and economy independently. The US federal government is relatively very weak legally when it comes to enforcing its will upon the sovereign states. Therefore what is logical and legal may be two different things and thus states can compete for business.

And moving onto your faulty analsis of the job situation based upon the rights of the states. If the US auto companies did not have the UAW, those 60K+ factory jobs announced by Ford, GM and DPH (MI, OK, VA, PA, GA, etc.) over the past 12 months would have been axed years ago. Legacy agreements kept those jobs as long as they did and in the process reduced the respective companies efficiencies and investment capabilites in growth. GM, F and C Group can build the same amount of vehicle today in a lot fewer plants with hundred of thousands less workers.

But your Honda example is still flawed for this very reason:

http://www.conway.com/ssinsider/incentive/ti0404.htm

"Michigan Fires Up $43.9M in Incentives for GM, German"

I am not an economist, but it isn't rocket science to see that every plant that Japan Inc opens is another nail in the coffin of GM and Ford.

That much is evident. Every new transplant facility in the US or NA, creates a generation of jobs. Every ill conceived and thought out program by GM and Ford is another nail in their coffin.

If it costs Indiana $100 million or so to buy these jobs while 30,000 jobs are being lost at GM - how is this benefiting America?

If Honda can do the same amount of work with 2,000 employees that it took GM 30,000 to do, then there was something screwed up with the way GM was doing things.

How is this benefitting America? Less employee's means lower overhead and less expensive cars.

How is this benefitting America? Less employee's means lower overhead and less expensive cars.

Plus, we actually have the jobs. Those cars could be getting imported instead...