Honda to End Motorcycle Output at First U.S. Plant

By Bill Koenig and Alan Ohnsman
Bloomberg.com

Feb. 27 (Bloomberg) -- Honda Motor Co., the world's largest motorcycle maker, will stop producing its bikes in the U.S. next year, shutting its first factory in the country as the company focuses North American manufacturing on autos.

The 450 workers at the Marysville, Ohio, factory will be assigned to other Honda facilities in the state, with no layoffs, spokesman Ed Miller said. Their work will be shifted to Japan and the plant, which opened in 1979, will close in 2009's first half, Honda said in a statement.

``We're exploring all our options,'' including using the building to make parts or as a warehouse, Miller said. He called the plant ``the seed'' for Honda's U.S. operations. It's too small for auto production, Miller said.

Honda's U.S. automaking is centered in Ohio, with an expansion under way with a new vehicle-assembly plant in Indiana. The Tokyo-based company builds cars, light trucks and engines in Ohio. Honda increased its U.S. sales of cars and light trucks 2.8 percent last year, while the industrywide total fell 2.5 percent.

Last year, the company's Ohio operations produced 701,317 cars and light trucks at two plants, as well as 719,861 transmissions and 1.1 million automotive engines. The vehicle production was equivalent to almost half of the 1.55 million cars and light trucks Honda sold in the U.S. during 2007.

Honda built about 44,000 VTX and Gold Wing motorcycles in Marysville last year. The plant's output peaked in 1997, with 174,000 motorcycles and all-terrain vehicles. Production of the all-terrain vehicles was later moved to South Carolina.

Consolidating in Japan

The large and mid-sized motorcycles now built at Marysville and at a plant in Hamamatsu, Japan, will be consolidated at a new factory in Kumamoto, Japan, Honda said. The company will keep making motorcycles in El Salto, Mexico, for sale in that nation.

Honda's U.S. market share for large street motorcycles fell in 2007 to 14.2 percent from 15.1 percent a year earlier, according to data released last week by rival Harley-Davidson Inc. Honda couldn't confirm the figures.

The Marysville site for the motorcycle plant was chosen by company founder Soichiro Honda, who died in 1991. He considered it an experiment to see if the company could eventually produce autos in North America. Last year, Honda Motor built 1.02 million cars and light trucks in the U.S., Canada and Mexico.

``It's the seed that grew Honda in Ohio and the U.S.,'' Miller said.

The motorcycle factory is part of a vehicle manufacturing and development complex that includes two auto-assembly plants, Honda's U.S. vehicle research and development center and one of the largest test tracks in the country, spread across almost 10,000 acres of former soybean fields and cattle pasture.

The Greensburg, Indiana, auto plant that's under construction and slated to start up later this year will be Honda's sixth vehicle-assembly factory and 13th of all types in North America. The company also is building a jet factory in Greensboro, North Carolina.

Honda's American depositary receipts rose 16 cents to $32.10 at 4:07 p.m. in New York Stock Exchange composite trading.

To contact the reporters on this story: Bill Koenig in Southfield, Michigan, at wkoenig @ bloomberg.net ; Alan Ohnsman in Los Angeles at aohnsman @ bloomberg.net

Last Updated: February 27, 2008 16:14 EST

Bloomberg