Honda Expands $2.2B Alabama Plant

By Gail Kalinoski

Honda Manufacturing of Alabama

Lincoln, Ala.—The announcement by Honda Manufacturing of Alabama that it’s planning an $85 million multi-phase expansion of its $2.2 billion plant in Talladega County could spur additional investment in the region’s industrial market. With this project, which is expected to complete its initial construction phase by 2018, Honda’s total capital investment at the Lincoln plant exceeds $750 million, including the addition of more than 450 workers.

“This significant financial investment in our Lincoln facility will enhance Honda’s manufacturing efficiency and flexibility to help us meet strong customer demand for our products and prepared us for future opportunities in our industry,” HMA President Jeff Tomko said in a prepared statement.

The new investment includes a building expansion of the south end of Line 1 for HMA’s vehicle assembly operations at the plant. The current 3.7 million-square-foot facility, which has more than 4,500 employees now, has the capacity to produce 340,000 vehicles and engines each year.

“I do think this continued investment in the plant by Honda is a good sign that it’s successful and will be here a long time,” Tripp Alexander, director and industrial market specialist at Colliers International in Birmingham, Ala., told Commercial Property Executive. “As a result, I think suppliers will continue to invest in the area and possibly expand or invest in new facilities as they maintain and receive further contracts.”

Alexander said availability of existing buildings is low across the state.

Tripp Alexander, director and industrial market specialist, Colliers International

“Perhaps this will drive the continued acquisition/development of industrial sites,” he added. “Based on all this, there’s no doubt that the project furthers the stability of the employment rate and real estate values in the area.”

The original plant, which cost $400 million to build, was announced in 1999 and construction began in 2000. It opened in November 2001 and a $425 million expansion was announced a year later. Over 3 million vehicles have been produced at the facility since 2001. It is the sole production site in the United States for the Honda Odyssey, Pilot and Ridgeline as well as the Acura MDX.

The Alabama Department of Commerce said nearly 30 Tier One suppliers have also located in the area to service the Honda plant. The facility has an estimated annual economic impact on the state of $6.8 billion, according to a University of Alabama analysis.

“Honda has been a powerful economic engine in Alabama, creating thousands of well-paying jobs and new levels of opportunity for residents in Talladega County and across the state,” Greg Canfield, secretary of the Alabama Department of Commerce, said in a prepared statement.