Honda poised to gain USA market share

Honda has never bought into big V8s, they never bought into body-on-frame pickups such as the ridiculous gas guzzling Ford F-250. Some Americans have low self-esteem and when they sit up high in their gas guzzling bloat-boxes it makes them feel like "big shots."

Honda is planning to hold an official dedication ceremony Monday at a new Civic plant in Greensburg, Ind., which will put even more pressure on domestic automakers who are rushing to produce more of their own small cars.

Although fuel prices have backed off from the historic highs of the summer, analysts say consumer demand for small cars is here to stay. Domestic automakers have filled their pipelines with plans to develop compact cars, but many of those plans aren't expected to bear fruit until 2010.

Honda, in contrast, put production changes in motion that will be completed next year. Honda began producing Civics at its Greensburg plant in October and by sometime next year plans to ramp up to a production rate of 200,000 annually. Eventually, Honda expects to be capable of delivering 50,000 Civics each month.

"Honda has never bought into big V8s, they never bought into body-on-frame pickups, and the Civic has always been a bread-and-butter model for them," said Paul Seredynski, executive editor of Edmunds.com. "Any facility that gives you the ability to produce more of your fuel-efficient models and one of your best-selling models cannot be a bad thing."

Honda's Greensburg plant will give the company a competitive advantage compared with many of the Detroit Three's aging plants and higher labor rates, said Gary Chaison, a professor of industrial relations at Clark University in Massachusetts.

"The Honda plant is the other side of the bailout story," Chaison said. "These are companies which are still expanding and which have lower cost structures. They are also facing the world financial crisis, but they are in much better shape."

Honda began producing Civics at its Greensburg plant on Oct. 9 with about 900 employees who started at a base wage rate of $18.71. By sometime next year, Honda plans to employ about 2,000 at the plant.

Under a new, two-tier UAW contract signed in 2007, the average base wage rate for existing workers at each of the Detroit Three is about $28 per hour, and new workers will be hired at base wage rates of $14 to $16.23 per hour.

"So much of the costs faced by GM and Ford are costs to workers who are no longer working anymore," Chaison said. "Essentially, Honda is paying workers who make cars, and GM, Ford and Chrysler are paying workers that made cars." More at Detroit Free Press