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Automakers’ resurgence adds jobs to Ohio economy

Domestic companies, Honda reinvest in tribute to state work force.

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By Thomas Gnau, Staff Writer Updated 12:52 AM Sunday, February 5, 2012

Following years of decline and a savage recession, automakers are reinvesting in Ohio’s auto industry because the state has what it takes to make quality cars and trucks, industry officials and observers said.

Automakers are investing in Ohio because it has an automotive work force and supply base that is “second to none,” said Eric Burkland, president of the Ohio Manufacturers’ Assocation.

Consider these recent announcements by the nation’s top automakers:

• Chrysler Group LLC said it will invest $500 million in its Toledo assembly plant and add 1,100 workers there by late 2013 to build a new Jeep.

• Ford Motor Co. said it will invest $128 million in its Avon Lake plant to convert production from vans to large commercial trucks, moving production from Mexico to Ohio, saving 1,400 jobs.

• General Motors said it will invest $198 million in its Toledo transmission plant and retain 250 jobs. GM also said it will invest $47 million in its Defiance powertrain plant to produce the fuel-efficient Ecotec engine.

• And closer to Dayton, Honda of America Manufacturing Inc. said last week it will invest $98 million in its Anna engine plant, the company’s largest, and create 150 new jobs in the state. And in January, Honda announced plans to build a new plant to manufacture its Acura NSX “supercar.”

Honda has in just 14 months announced more than $500 million in new investments in Ohio.

Besides the manpower, the state also has broad technical capabilities in design and engineering, metals casting, forging, polymers, advanced materials and other facets of building modern automobiles.

That kind of know-how is attractive to the aerospace and energy industries as well, Burkland added.

“We have all that in Ohio,” he said.

Before the 2008-2009 recession, Ohio suffered from what Burkland called “obsolete products and obsolete plants.” But today’s investments are being used to modernize auto plants in the state so they can make the next generation of products and help secure the plans’ future, Burkland said.

“The key in Ohio is getting those products,” Burkland said. “And we’re getting them.”

Honda, for example, will make parts in Anna for its new gearless transmission in a powertrain retooling that will add 150 jobs to its Anna and Russells Point plants. The automaker pledges to become the “fuel-efficiency leader” in its fleet segments in the next three years.

Ron Lietzke, a Honda spokesman, declined to say how much in total it will cost Honda to upgrade its powertrains fleetwide, but he acknowledged the overall investment will be “substantial.”

“What we are doing is showing the world that Honda’s Buckeye (workers) can compete with anyone anywhere,” Hide Iwata, Honda of America president and chief executive, said last week in Anna.

Honda currently has about 13,500 Ohio workers, including about 1,300 who commute from the Dayton area and another 1,400 who live in Clark and Champaign counties.

“I really think the sun is starting to come up in Ohio,” Ohio Gov. John Kasich said in December at Ford’s Avon Lake plant. “It’s been a pretty good couple of months.”

Of course, Ohio has sustained massive cutbacks in its automotive industry, too. Among them are GM’s 2008 closing of its sport utility vehicle assembly plant in Moraine, a move that eliminated more than 1,000 jobs. (GM still co-owns a diesel truck engine plant with Isuzu in Moraine that employs about 550 people.)

But David Cole, chairman emeritus of Ann Arbor, Mich.’s Center for Automotive Research, said it’s a new day, not just for Ohio but for several states across the Midwest. Revamped labor contracts and a lowered dollar valuation (compared to the yen and the euro) have made manufacturing in Ohio and the United States less expensive, he said.

And automakers, who like to produce where they sell, are eyeing the fact that the U.S. adds about a million households a year due to births and immigration, Cole said.

He called 2012’s automotive manufacturing environment “a different world.”

“I’d say Ohio, Michigan and Indiana are all going to benefit tremendously from this,” Cole said.

Burkland notes that when the recession hit in 2008, North American annual auto sales sank to about 9 million and many observers wrote off the industry.

“Fortunately, we did not do that in Ohio,” Burkland said.

Adam Brannon, mayor of Bellefontaine in Logan County, estimated that a quarter of the city’s 13,000 residents work for Honda or suppliers to Honda. Like others, he welcomes news of a rejuvenated Honda, a company moving forward from last year’s earthquake in Japan and flooding in Thailand that decimated the company’s sales and profits.

“This is always a good thing here,” Brannon said. “Half-a-billion dollars of investment is just lovely.”

The investments go beyond towns and townships in which Honda facilities are located. Lietzke noted that any time an automaker retools or updates technology, that has implications for suppliers who must invest as well.

Last year, Honda bought $5.8 billion of parts from 150 Ohio suppliers in 50 of Ohio’s 88 counties.

“We know these kinds of announcements and these kinds of things benefit the region,” said Mike Dodds, executive director of the Sidney-based West Ohio Development Council.

Paul Benedetti, president and CEO of the Logan County Area Chamber of Commerce, said he and Brannon traveled to Japan last year to meet with Honda executives. There, they were told that the company’s Ohio facilities — two auto assembly plants and two powertrain plants, among smaller research and distribution sites — were the company’s most productive plants anywhere.

“That was part of our hope, that things like this (Honda’s announced investments) would happen,” Benedetti said.

Contact this reporter at (937) 225-2390 or tgnau@DaytonDailyNews.com.

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