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Honda expands production in Ohio

Ohio will be more important than ever to Honda’s future as the automaker has invested nearly $900 million in the state over the past three years, company officials said.

That investment in turn makes Honda increasingly important to Ohio’s economy.

Through a global recession — as well as an earthquake, tsunami and flooding in Asia — Honda has announced more than $2 billion in investments in North America production capacity. Nearly half of that has been in west central Ohio, focused on the company’s four main production sites in East Liberty, Marysville, Anna and Russells Point.

The $870 million Honda has invested in the Buckeye State in the past three years is enough to build a new assembly plant. In 2012 alone Honda invested nearly $500 million in its main Ohio plants.

And the company isn’t finished with investments in Ohio. A Honda spokesman told Cox Media Group Ohio that there will be further “major” Ohio investments announced this summer, although he would not elaborate.

“The bottom line is that Ohio is central to Honda operations in North America and certainly will continue to be,” said Ron Lietzke, a Marysville-based spokesman for Honda North American Inc.

Already, half of all vehicles assembled in Ohio today have a Honda badge on them, Lietzke said.

Earlier this year, the company moved several key Honda North America departments to Ohio, effectively making the state the center of its U.S. operations, which has 28,000 employees. About 13,700 of those employees work in Ohio.

Ed Miller, a Detroit-based Honda spokesman, said such a transformation was never expected in 1979 when Honda opened its first Ohio plant, a motorcycle assembly facility in Marysville.

“If you’re an old guy like me, in the 70s, no one would have thought the U.S. auto industry would change like that,” Miller said.

Cox Media Group Ohio is the first media company to view firsthand the physical changes taking place at Honda’s East Liberty plant in Logan County. There, the automaker is investing more than $180 million in a new sub-assembly line while extending the main auto assembly line and making other changes — expanding the plant’s quality inspection department by 40,000 square feet, building a 395,000-square-foot consolidation center, renovating the plant’s paint line and more.

When work is complete, East Liberty, sometimes called ELP, will have an entirely new assembly line.

What Honda managers consider noteworthy is that ELP will shut down for only one week — this week — while much of that work is happening, said Joe Nerone, ELP assistant chief inspecting engineer.

Typical assembly work will continue around the construction, which Greg Gray, Honda project leader for innovation, called “an auto industry first.”

“That’s very unusual,” Lietzke said. “A lot of time plants will shut down to retool.”

Even during the off week, which is a regularly planned shutdown that happens every July, ELP will still have hundreds of employees doing expansion and renovation work. During regular production, the plant has 2,400 employees assembling about 240,000 vehicles a year.

Gray said in some ways he would love to have a several-month shutdown, much like how a Ford plant in Louisville, Ky., took seven months for a retooling. But that would mean stranding suppliers and laying off employees, and no full-time Honda employee in Ohio has been laid off, he said.

“It’s a process you have to work through,” Gray said.

The changes are driven by customer expectations and stricter federal fuel economy standards. Customers want greater fuel efficiency without sacrificing power or comfort, Honda believes. Quite often, they also want room to carry people and goods.

“It’s all based on what society expects,” Lietzke said.

For example, the East Liberty plant opened in the late 1980s building Civics. But today, the site produces only SUVs or crossovers: the Honda Crosstour, the CR-V and the Acura RDX.

ELP products reach 80 countries, and vehicles are often customized for conditions elsewhere. A CR-V bound for Russia’s rougher roads, for example, will have bigger wheels, LED headlights, door mirrors with turn signals, fog lights, a wider license plate base — and a cigarette lighter.

The plant exports about 10 percent of its production.

But the products are highly desired in the U.S. as well. The CR-V is regularly close to the Ford Escape in sales and was just ahead of the popular Ford Focus in May sales. In May sales, three Honda models made the top 20 most popular models, including the Accord at No. 4, the Civic at No. 7 and the CR-V at No. 11.

Kelley Blue Book also identifies the 2014 CR-V as the No. 1 “most researched” crossover vehicle. The Accord is the most researched sedan, according to Kelley.

Honda leaders are proud of those numbers, particularly since the company does not engage in fleet sales.

The auto industry, meanwhile, is awaiting Honda’s renewal of the Acura NSX “supercar,” which will be built in a former Honda Logistics site off U.S. 33 not far from the East Liberty plant.

“They can’t get the NSX fast enough,” Jim Hall, managing director of 2953 Analytics, recently told USA Today. “Acura needs a serious flagship with a clear connection to the rest of its models.”

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