ldoto
October 13th, 2005, 07:37 AM
Chasing Honda
A variety of factors make London a top contender with the automaker reported to be eyeing a new plant, observers say.
London is a leading contender to land a new Honda Canada auto plant, business and industry officials say.
The company is reportedly looking at building a third assembly operation, with Ontario the likely destination.
Observers said yesterday there are few places left in the province that a major assembly plant could be built.
But London -- factoring in cost, workforce, geography, transportation and proximity to suppliers and market -- is one.
Among the reasons why:
- Honda has exhausted the workforce in Alliston, where its two plants employ 4,000, said Gerry Fedchun, president of the Automotive Parts Manufacturers' Association.
- High costs may keep Honda out of the Toronto area.
- The Kitchener-Woodstock corridor is "used up," Fedchun said, between the two Toyota plants in Cambridge, the Cami plant near Ingersoll and the new Toyota plant being built near Woodstock.
"They may skip over those areas and land in London," he said of Honda.
A new Honda auto assembly plant would be "west of Toronto and it will be close to Highway 401," said Carlos Gomes, automotive analyst with Scotiabank in Toronto.
"London is certainly a possibility -- you have the supplier base there," he said.
London, Brantford, Hamilton and Newmarket may contend for the plant, said Fedchun.
Chatham, he said, is too small a region and Windsor has a reputation for unionism. That will scare off the Japanese automaker, which doesn't have the Canadian Auto Workers union at its Alliston plants.
But even if it locates within an hour's drive of London, "it will still mean a big chunk of business" for the city, said Fedchun.
Honda, already an auto giant, is looking at increasing capacity in North America before the end of the decade because existing production won't be able to meet demand.
The company has quietly started the process of considering plans for a third assembly plant, likely in Ontario, media reports said yesterday.
The company has not made its intentions public.
The London Economic Development Corp. has contacted Ontario's Ministry of Economic Development and Trade to make its pitch to attract the plant, said John Kime, the corporation's president and chief executive.
"We already have our oar in the water on this one," Kime said. "We will compete very aggressively for this. We will figure out how to get to the right people at the automaker."
London has land available for a large plant, but it needs to be serviced and some of it is in private hands, said Kime.
Honda makes about 400,000 vehicles a year in Alliston.
"Honda's sales are taking off and they want to use Canada as a production base," said Gomes. "Canada has a cost advantage over the U.S. It has eroded, but it is still an advantage."
Wages are lower in Canada and low health-care costs also are attractive, he added.
Honda also has three major auto assembly operations in the U.S. and a small plant in Mexico.
It likely will make a decision within the next 12 to 18 months, in time to make new models for the North American market.
A variety of factors make London a top contender with the automaker reported to be eyeing a new plant, observers say.
London is a leading contender to land a new Honda Canada auto plant, business and industry officials say.
The company is reportedly looking at building a third assembly operation, with Ontario the likely destination.
Observers said yesterday there are few places left in the province that a major assembly plant could be built.
But London -- factoring in cost, workforce, geography, transportation and proximity to suppliers and market -- is one.
Among the reasons why:
- Honda has exhausted the workforce in Alliston, where its two plants employ 4,000, said Gerry Fedchun, president of the Automotive Parts Manufacturers' Association.
- High costs may keep Honda out of the Toronto area.
- The Kitchener-Woodstock corridor is "used up," Fedchun said, between the two Toyota plants in Cambridge, the Cami plant near Ingersoll and the new Toyota plant being built near Woodstock.
"They may skip over those areas and land in London," he said of Honda.
A new Honda auto assembly plant would be "west of Toronto and it will be close to Highway 401," said Carlos Gomes, automotive analyst with Scotiabank in Toronto.
"London is certainly a possibility -- you have the supplier base there," he said.
London, Brantford, Hamilton and Newmarket may contend for the plant, said Fedchun.
Chatham, he said, is too small a region and Windsor has a reputation for unionism. That will scare off the Japanese automaker, which doesn't have the Canadian Auto Workers union at its Alliston plants.
But even if it locates within an hour's drive of London, "it will still mean a big chunk of business" for the city, said Fedchun.
Honda, already an auto giant, is looking at increasing capacity in North America before the end of the decade because existing production won't be able to meet demand.
The company has quietly started the process of considering plans for a third assembly plant, likely in Ontario, media reports said yesterday.
The company has not made its intentions public.
The London Economic Development Corp. has contacted Ontario's Ministry of Economic Development and Trade to make its pitch to attract the plant, said John Kime, the corporation's president and chief executive.
"We already have our oar in the water on this one," Kime said. "We will compete very aggressively for this. We will figure out how to get to the right people at the automaker."
London has land available for a large plant, but it needs to be serviced and some of it is in private hands, said Kime.
Honda makes about 400,000 vehicles a year in Alliston.
"Honda's sales are taking off and they want to use Canada as a production base," said Gomes. "Canada has a cost advantage over the U.S. It has eroded, but it is still an advantage."
Wages are lower in Canada and low health-care costs also are attractive, he added.
Honda also has three major auto assembly operations in the U.S. and a small plant in Mexico.
It likely will make a decision within the next 12 to 18 months, in time to make new models for the North American market.