Honda adds 50 jobs, $23M expansion

Honda by the numbers:

Honda of America Manufacturing will create 50 new jobs and invest $23 million to expand the Marysville Auto Plant and add a hybrid car line for fall.

Honda, which employs 1,475 workers in Clark and Champaign counties and 1,200 more from the rest of the Miami Valley, announced Thursday it will add production of a two-motor Accord Hybrid sedan.

The new positions will be full-time production jobs involved in parts handling and assembly, Honda spokesman Ron Lietzke said.

“The people hired may not go directly into hybrid production, as we may be transferring some people already here into those positions,” Lietzke said.

Honda, which employs 13,500 people in Ohio, picked Marysville for the hybrid as most of the Accords sold are built in Marysville already. Last year Honda launched the new 2013 Accord from the auto plant.

But to accommodate Honda’s latest hybrid creation, the automaker must invest heavily in the plant — spending $23 million to expand it by 95,000 square feet, lengthen the main assembly line and add parts in some of the sub-assembly areas.

“There’s quite a bit of investment to introduce new technology,” Lietzke said. “This is another step toward growing hybrid production in the U.S.”

The Accord Hybrid is the first to be built in Ohio. Currently the company builds an Acura Hybrid in Indiana and released a plug-in Accord Hybrid model built in Japan in 2012. The company also makes hybrid models of the Civic, Insight and CRZ.

“We have always built our products in the areas that we sell them,” Lietzke said, adding that Honda is seeing a growth in demand for hybrids locally.

In 2012, hybrid cars represented 3 percent of total U.S. auto sales, according to data from Baum and Associates, a Michigan-based auto industry research and analysis firm. That’s up from 2.1 percent of car sales in 2011.

Year-end hybrid sales totalled nearly 434,500 cars, up from 269,210 hybrid cars sold in 2011.

“There have been more models of (hybrids) across the industry,” said Alan Baum, principal of Baum and Associates.

Toyota remains the leader in hybrid cars, Baum said, while Honda has had its ups and downs.

But the “Accord is new technology for them, a new version of the hybrid more in the mainstream,” Baum said. “So we expect it to do reasonably well.”

Baum said hybrid sales have grown — and will continue to grow — for two reasons: More hybrid vehicle models are being offered and the extra costs associated with driving a hybrid are dropping.

“The more products offered in higher values reduces cost premiums,” Baum said.

Auto analyst Dave Cole said he agrees that hybrid sales may increase, but he doesn’t anticipate hybrids having a major effect on the market. If anything, Cole said the hybrids are more to help auto manufacturers reach government standards for gas mileage.

“Much of interest in hybrids is driven by compliance with future fuel economy standards,” said Cole, chairman emeritus of the Center of Automotive Research.

Government fuel efficiency standards will reach 35 miles per gallon in a few years, he said, and in the mid 40s by 2025. Manufacturers receive credits against the fuel standards for producing hybrid vehicles — allowing automakers to keep building and selling other cars that might not make the standards.

While the costs are coming down, Cole also said it’s still expensive to have a hybrid car because of extra parts and the cost of batteries.

“As you increase fuel economy to the vehicle, the value of each incremental improvement gets smaller,” Cole said. “It shows when you get to 35 and 40 miles per gallon. The value the customer gets in improvement is pretty small.”