Honda dedicates Indiana plant

Honda’s Ohio plant will scale back Civic production because of the new factory.

GREENSBURG, Ind. (AP) — Honda Motor Co. dedicated its first Indiana car assembly plant Monday against the backdrop of a slumping economy and a possible multibillion dollar bailout for the three largest U.S. automakers.

Honda Manufacturing of Indiana started churning out fuel-efficient Civic sedans last month at its new $550 million factory, which sits halfway between Indianapolis and Cincinnati. But assembly lines paused Monday morning for the dedication ceremony, leaving a line of blue Civic frames suspended from conveyor belts snaking through the factory.

Hundreds of guests and employees clad in white lab coats gathered around a temporary stage. Honda President and Chief Executive Takeo Fukui told them the company opened this factory “at a very challenging time.”

U.S. auto sales fell to their lowest level in more than 17 years in October. Honda, which has 16 manufacturing sites in North America, reported a 41 percent drop in quarterly profit last month and was forced to lower its forecasts for the full year.

“We face a difficult economy ... but at Honda, we have always understood that challenging times represent opportunity,” Fukui said, noting later in a brief talk that the demand for efficient products like the Civic remains strong.

Honda eventually plans to make 200,000 gasoline-powered Civics a year by operating two shifts at the factory, which covers 42 acres. The company also said Monday it would shift production of a compressed natural-gas version of the Civic to Greensburg by mid 2009 from a plant in East Liberty, Ohio, that is dialing down its Civic production and increasing work on the Honda CRV.

Indiana Gov. Mitch Daniels said after the ceremony the new factory offers a “pretty graphic demonstration” that a company can succeed in tough economic times” if you build a great product and deliver value to your customers” and use modern management techniques.

“Our state should take some inspiration from that,” he said. “Maybe to some extent their competitors should too.”

Honda’s U.S. competitors — General Motors Corp., Ford Motor Co. and Chrysler LLC — have asked Congress for an infusion of $25 billion, and Democrats want to use part of the $700 billion Wall Street bailout to help.

But U.S. Rep. Mike Pence, R-Indiana, who attended the dedication, opposed the $700 million bailout plan. He said after the ceremony he’s not in favor of bailing out Detroit’s Big Three either.

“I think most Americans know we can’t bail our way back to a growing economy,” he said.

He said the federal bankruptcy system would allow the carmakers to “get some breathing room, restructure and reorganize their business model” like the airline industry did.

“I’m someone that really believes the freedom to succeed also includes the freedom to fail, and I think Washington, D.C., needs to take a step back before we expand any additional burden on the taxpayer to deal with what ails our economy or any individual business in the economy,” he said.