2:43pm

Fri April 5, 2013
Economy

Honda's Growth Helps Tow Ohio Out Of Recession

Originally published on Fri April 5, 2013 6:04 pm

Honda is moving its North American headquarters from California to Ohio. 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

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

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.

Copyright 2013 WOSU Public Media. To see more, visit .

Transcript

ROBERT SIEGEL, HOST:

As we just heard, Honda is moving its North American headquarters from California to Ohio, and that's where we're headed next. The move is just the latest bit of good news for Ohio and for Honda, whose fortunes have been closely tied for decades. From member station WOSU in Columbus, Steve Brown reports.

STEVE BROWN, BYLINE: 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.

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

ROB MAY: If you look at I-47 column down there, that's about the end of the assembly line previous, but we added about 12, 14 units at the end. All this was just kind of wide open space here.

BROWN: Plant manager Rob May gives a tour of the factory that produces Honda Accords and several Acura models. More than 4,000 employees build 1,900 vehicles here every day, and they're adding another 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. Company spokesman Ron Lietzke says with Honda's Ohio operations in a continuing growth spurt, it makes sense to move the headquarters here.

RON LIETZKE: It will increase the speed of making decisions, it will increase the speed of introducing new models, and it will improve our communications activities throughout the organization in North America.

BROWN: 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. Adam and Justin McMahon are installing cabinets on a house just outside of Marysville. The brothers 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 and foreclosure then renovated them and flipped them for a profit. It's been so lucrative Adam is considering doing it full time.

ADAM MCMAHON: It's a lot easier. It'd be nice. I think there's more money in it, so we started buying houses through the winter and it's - that gives us our profit for that year.

BROWN: And there's plenty of profit to be had. The latest report shows statewide home sales up 10 percent over last year, 20 percent in the Columbus region. The auto industry is also picking up in Cleveland, Toledo and other parts of the state. The state's unemployment rate is about 1 percent below the national average, and incomes here are rising faster than in all but two other states. Higher land and commodity prices have also helped agriculture here, the state's largest industry. Michael Brandl, an economist at Ohio State University, says Ohio is becoming increasingly attractive for both workers and employers.

MICHAEL BRANDL: 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, decent educated workforce. You can see why lots of firms are thinking about and relocating here, as well as starting here.

BROWN: Brandl says those start-ups should help diversify the economy here even more and ensure that Ohio continues to outperform other states clawing their way back from the recession. For NPR News, I'm Steve Brown in Columbus.

AUDIE CORNISH, HOST:

And tomorrow morning, Scott Simon will have the stories of two Americans who have had to claw their way back from the recession, including a former journalist now making three times his old salary as a truck driver. That's tomorrow on WEEKEND EDITION from NPR News. Transcript provided by NPR, Copyright NPR.

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