While not directly employing people from the region — unless they move or commute to downstate Greensburg — the new American Honda Motor Co. plant will benefit the whole state, officials said.
In fact, Northwest Indiana businesses already are expecting orders from the automobile assembly plant.
Indeed, whether Honda had built in Ohio or Illinois, Mittal Steel USA was sure to be asked to supply materials.
“We supply virtually every automaker in the United States,” said David C. Allen, communications manager for Mittal. “We have done business with Honda ever since they came here.”
With Honda’s announcement Wednesday that it will build a plant in Greensburg, some business and state officials expect statewide benefits.
But most of the immediate economic benefits will go to central Indiana, already home of a foreign-car company’s plant.
So why didn’t Honda think about Northwest Indiana?
Honda chose the location based on proximity to suppliers, according to David Iida, Honda spokesman.
“We already have 46 suppliers in Indiana,” said Iida, adding the majority of those suppliers are in central and eastern Indiana.
Larry Jutte, senior vice president of Honda of America Manufacturing Inc., would not divulge to reporters the names of other areas considered. He said the Greensburg site was close enough to suppliers to be chosen, but not too close, indicating Honda did not want to disrupt employment at its supply companies or its own Ohio plants in Marysville and East Liberty.
Another factor in location may have been labor. Northwest Indiana has no automotive plants, and some speculate union activity here steers foreign automobile companies away from the region.
Honda associates historically have not sought to organize, Iida said, and Honda’s American plants are not unionized.
“Clearly, the Japanese-owned auto plants ... do not want to be dealing with the unions,” said Dana Smith, the president of the West Lafayette Chamber of Commerce.
In north-central Indiana area, the nonunion factor may have helped land the automobile factory run by Subaru of America Inc., Smith said.
The Tippecanoe County plant broke ground in 1987, and recently announced a subcontracting deal with Toyota Motor Corp. to build the Toyota Camry model.
The Japanese-owned plant, which employs 2,400 people, is nonunion, Smith said.
Smith said the Honda plant will create economic spin-offs and opportunities all around Indiana.
Honda will build the $550 million auto assembly plant as part of a $1.18 billion global expansion, company officials said Wednesday, ending a five-state scramble and bringing jobs to a state hit hard by manufacturing losses.
The factory will employ 2,000 nonunion workers and eventually produce 200,000 vehicles annually, officials said.
The Japanese automaker announced in May that it planned to build its sixth North American plant in the Midwest, but did not say where. Officials from Ohio, Indiana, Michigan, Illinois and Wisconsin promoted sites in their states.
“We believe that the great state of Indiana has what we need to continue ... success: an outstanding community of people, excellent transportation systems and the necessary infrastructure to support industry,” said Koichi Kondo, president of American Honda Motor Co.
Gov. Mitch Daniels, who returned to Indiana early after a trip to Asia, welcomed Honda officials.
“Honda is going to feel right at home in Indiana, and you are going to love Greensburg and this part of our state,” Daniels said.
The Honda plant will help invigorate the state’s economy, which has lost 98,000 industrial jobs since 2000.
Construction will be completed in 2008. Kondo declined to say which vehicles would be produced, although the cars would be four-cylinder models. An Ohio plant will provide the engines, Honda said.
Illinois officials have said Honda considered one location in Illinois. Although they declined to disclose that spot, speculation had centered on Fithian, a hamlet between Urbana and Danville.
“We did everything possible to bring Honda to Illinois. Unfortunately, Honda made its final decision based on geography,” Illinois Gov. Rod Blagojevich said in a statement Wednesday.
Honda and its larger Japanese rival, Toyota Motor Corp., have been increasing their North American manufacturing capacity to keep up with demand, even as U.S. automakers General Motors Corp. and Ford Motor Co. are cutting thousands of jobs and closing plants as their market share declines. North America accounts for about half Honda’s annual global sales.
The Associated Press contributed to this article.