“We will renew the dream and build this high-tech supercar right here in Marysville, Ohio, says Honda of America chief executive, Hidenobu Iwata.

Hundreds of employees cheered Iwata as he announced the company will spend $70-million to build the Acura NSX in Marysville. The NSX was manufactured in Japan from 1990 to 2005. Governor John Kasich called Honda’s decision a “home run” for Ohio.

“This is as good as it gets. I mean this is Ohio really continuing to be defined as cool, a cool place to be. So hopefully a lot of these young people on the coasts will want to come to a place like Marysville,” says Kasich.

Honda will use 100 existing workers to develop the car. A concept model on display is low-slung, seats two, features LED headlights and a speckled metallic finish. Spokesman Ron Lietzke says Honda’s skilled workforce in Ohio and its existing supply chain convinced top executive to produce the car in Marysville. It will be Honda’s 3rd auto plant in the state. Lietzke says the NSX will hit showrooms in 2015.

“We’re two years away from producing the car. So as we get closer to production we’ll be evaluating what the market is and what the actual sales will be. We’re also not going to be announcing the price of the vehicle until we get closer to the on sale timing in about two years.” Says spokesman Ron Lietzke.

Lietzke says Ohio will be the only assembly plant for the NSX. So, some of the cars produced at Marysville will be exported.

That’s just the latest bit of good news for the Buckeye State and Honda, whose fortunes have been closely tied for decades now.

Honda has been an economic heavyweight here since it was lured to central Ohio in the 1970s. The company’s footprint is big, and it continues to increase.

Honda’s sprawling Marysville Auto Plant opened outside Columbus in 1982. Since then, it has grown to nearly 4 million square feet and now sits on a campus of 8,000 acres.

More than 4,000 employees build 1,900 vehicles here every day, including Honda Accords and several Acura models, and the company is adding 100,000 square feet to the plant to build a new hybrid.

That means more work for nearby engine and transmission plants, and for the more than 150 Ohio companies that sell parts to Honda.

A Broad Impact

A new Honda Accord gets ready to roll off the
assembly line at the Honda factory in Marysville,
Ohio. Photo: WOSU/Steve Brown

Company spokesman Ron Lietzke says with Honda’s Ohio operations in a continuing growth spurt, it makes sense to move the headquarters here.

“It will increase the speed of making decisions, it’ll increase the speed of introducing new models, and it will improve our communications activities throughout the organization in North America,” he says.

With more cars being built here and expanding global markets, Honda of America expects to soon become a net exporter of vehicles for the first time, sending cars to Asia and the Middle East. And as Honda goes, so goes much of the rest of central Ohio’s economic development.

A Boon To Housing

A before and after look at a house in Marysville that was renovated by brothers Adam and Justin McMahon.

Brothers Adam and Justin McMahon have helped run a family roofing business since high school. When business took a hit during the recession, they decided to try to take advantage of the housing crisis.

They started buying up rundown houses in foreclosure, then renovated them and flipped them for a profit. It’s been so lucrative that Adam McMahon is considering doing it full time.

“It’s a lot easier. It’d be nice — I think there’s more money in it,” he says, “so we started buying houses through the winter, and that gives us our profit for that year.”

And there’s plenty of profit to be had. The latest report shows statewide home sales up 10 percent over last year — up 20 percent in the Columbus region. The auto industry is also picking up in Cleveland, Toledo and other parts of the state.

Attracting More Employers

The state’s unemployment rate is about 1 percentage point below the national average, and incomes in Ohio are rising faster than in all but two other states. Higher land and commodity prices have also helped agriculture, Ohio’s largest industry.

Michael Brandl, an economist at The Ohio State University, says Ohio is becoming increasingly attractive for both workers and employers.

“Ohio has a great advantage over some other places where people are thinking of locating, in terms of sound infrastructure, relatively low cost of living, a decent educated workforce,” he says. “You can see why lots of firms are thinking about and relocating here, as well as starting here.”

Brandl says those startups should help diversify the economy here even more and ensure that Ohio continues to outperform other states clawing their way back from the recession.

The auto maker announced Thursday that it will invest $23 million and add around 50 new jobs at the Marysville plant to build the 2014 Accord hybrid sedan. The car will be the third Honda hybrid model built in North America and will go on sale nationwide this fall.

The 95,000-square-foot Marysville plant is being expanded to house assembly processes for production of the two-motor Accord hybrid.

The company says it has announced investments at its four Ohio manufacturing plants of more than $800 million in the past three years. Honda has assembly plants in Marysville and East Liberty, builds engines at its Anna facility and transmissions at Russells Point.

Inside the Honda plant in Marysville, Ohio, a virtual conga-line of Accords rotate through the welding line. Once the line stops rolling, dozens of insect-like robotic arms fall upon them. Golden sparks erupt across the floor like fireworks.

“This new Accord has about 2500 spot welds.”

Like every Honda worker – or “associate”—plant manager Jeff Tomko wears a white jumpsuit with his name stitched on the chest. Since starting with Honda 26 years ago, he’s seen the company grow tremendously.

“Just here at Marysville, we’ve got 44-hundred associates. And within the Ohio area, we’ve more than 13-thousand. If you add our suppliers on top of that, it’s a really big impact not just in our community, in Ohio, but in North America and globally. And with our recent investments of more than 2-billion here locally, we’re going to continue to grow.” Says Tomko

Not many saw a future for Honda back in 1982, when it opened its first American plant. Foreign car makers were seen as a threat to the nation’s jobs and manufacturing reputation. So Honda’s Marysville venture was considered a bold move. In fact, says Paul Ingrassia

“It was a downright reckless move.”

Ingrassia is deputy editor-in-chief at Thomson-Reuters, and has covered the automotive industry for 30 years. He says early on, Honda was a third tier Japanese car maker, dwarfed by Toyota and Nissan in its home market. But in the U.S., where American-made cars were getting poor consumer reviews and foreign cars were gaining in popularity, Honda saw opportunity… and took it a step further.

“The company decided that, `Gee…they’ll probably be some protectionist sentiment’ and to counteract that protectionist sentiment, we’ll need to actually build cars in the U.S. and employ American workers.’ And what Honda did was prove that American workers can build great cars.” Says Ingrassia.

Honda’s first line of U-S built Accords rolled out in November of 1982, and it’s mostly been a smooth ride since. By replacing the executive-worker system with a more inclusive team model, and fostering innovation among employees, it changed the culture of the auto industry. Its Accord has remained one of the top-rated and top-selling cars ever. Honda also inspired Nissan and Toyota to open plants in America, shortly after opening its Marysville plant.

But Ned Hill, an economist at Cleveland State, says Honda’s trailblazing has put it at a competitive crossroads.

“There was a period of time where Honda was getting complacent…in fact in the past, they only looked at Toyota, they were the big brother in Japan. Well, they’ve put Ford and GM in the exact same place as Toyota right now.”

Hill says besides cars like the Ford Fusion, Chevy Cruze, and Toyota Camry giving Honda tough competition, there are new, higher fuel efficiency standards enacted by the White House, and ongoing consumer demand for more comfortable, affordable cars. Hill says if Honda wants to stay ahead, it’ll need to retain its edgy, bold corporate culture. Honda’s already revisiting its Civic design, after tepid reviews of its 2012 model. Two other recent setbacks aren’t helping, says Mike Accuvitti Honda’s Vice-President of Automobile Marketing:

“Last year, Honda was hit by two unprecedented natural disasters. First, the great Japan earthquake-slash-tsunami. Followed by some serious flooding in Thailand.”

Accuvitti says despite this disruption in production and supply chains, Honda expects end of the year sales to be up 25-percent from 2011. And Honda still aims to boost North American production, to where 90-percent of its cars are made here. But while the outlook is good for Honda’s line of vehicles, it’s learning to share the road with competitors who’ve watched the company grow…and have taken notes.

Just a year ago, thousand of central Ohio Honda employs were sitting at home amidst a parts shortage following the tsunami in Japan.

The auto giant reports its on pace to top 2011 production by 75 percent and could build as many as 1.7 million vehicles this year. That would surpass the company record set in 2007.

A spokesman for Honda’s Marysville plant says they’re still scheduling daily overtime and Saturday shifts to keep up with demand. Toyota has seen a similar bump in production this year. Other manufacturers including Ford and General Motors have seen modest increases in 2012.

The automaker says it will fix a problem with the headlight wiring. Affected vehicles include 2002-2004 CR-Vs and 2003 Pilots.

Honda says there isn’t enough slack in the wiring leading to the headlight switch. Over time the wires can work their way loose and cut off the low-beam lights. No crashes or injuries have been reported due to the problem.

Owners will get recall notices in the mail starting in late April.

Honda employs about 13,000 people in Central Ohio, making it one of the region’s largest private employers.

The engine plant in Anna will make high-tech pulley components for Honda’s new continuously variable transmission, or CVT.

That’s on top of the $120 million Honda will spend to add an assembly line at the transmission plant in Russells Point, near Bellefontaine.

The combined investments are expected for create about 150 jobs.

Honda first came to central Ohio when it opened the Marysville Motorcycle Plant in 1979, and has since added auto and parts factories in Marysville, East Liberty, Anna, and Russell’s Point.

Executives used the Detroit Auto Show as a backdrop to announce they’re reviving the Acura NSX, a sleek sports car previously built in Japan before production was canceled in 2005 because of poor sales.

Honda spokesman Ron Lietzke says they’ve improved the NSX design since then, and supply-line improvements will finally allow U.S. production.

“This is really a culmination of our capabilities here in the United States to develop that kind of a vehicle, just as we’ve been developing the Acura MDX, the Odessey, and other products that are produced here in the United States and North America,” Lietzke says.

Lietzke would not say exactly where the car will be built, but he says the company will build a new factory somewhere near their current operations outside Marysville with cars rolling off assembly lines in about three years.

That’s good news for Eric Phillips. He’s executive director of the Union County Economic Development Partnership.

“Honda’s continued commitment and their investment in central Ohio means great things to come. Our partnership has been very close since they started in 1978, and we’re very appreciative of their continued commitment and their investment in our community,” Phillips says.

Honda has not said how many more jobs they’ll bring to the community. The company now employs some 13,000 people in the region.

The auto company wants to take advantage of a favorable currency exchange rate between the dollar the yen. Spokesman Ron Lietzke says jobs are being added at regional assembly and transmission plants.

“As we add shifts, we’ve added employment at the Marysville plant and our Indiana plant. We’ve also added some employment at the transmission plant (in Russell’s Point).”

Honda currently employs more than 13,000 workers in Ohio at plants in Marysville, Anna, East Liberty, and Russell’s Point.

Last week, Honda said flood damage to several key parts suppliers in Thailand was forcing 50 percent production cuts at all six of its North American plants, including factories in East Liberty and Marysville.

On Tuesday, the company said the flooding was still forcing production changes, but not as bad as previously feared.

A company spokesman says they still will not build as many CR-Vs as hoped, but they can build enough to beef up inventories before announcing an on-sale date in December. The company also say that some plants, including those in East Liberty and Marysville, will boost production from 50 to 75 percent capacity.

The cuts will continue at least through Thanksgiving.