Well cool. Greensburg has landed the new Honda plant. Money in the pockets of middle class workers does a lot to make everybody’s life better.
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[…] Old economy v. New economy By Doug It’s hard not to regard the announcement of a new Honda plant coming to Greensburg as good news for the state. However, this story by Ted Evanoff of the Indy Star (and this most excellent comment from Paul O’Malley), suggest that the new plant won’t be an unmitigated blessing. […]
Does time zone and/or DST have anything to do with this decision to locate Honda in Greensburg?
Sure Lou, but only if you will agree that GM and Subaru put assembly plants in Fort Wayne and Lafayette, respectively, because of year round standard time and Toyota put an assembly plant in Gibson County because of Central Time.
In a college geography class in the early 90s, I recall being told that a study had reached the conclusion that the area within maybe a 100 mile radius of Cincinnati was the ideal location for auto manufacturers given considerations of transportation routes, proximity to the U.S. population and probably a bunch of other factors I don’t recall or never knew.
Following the experience of Volkswagen in Pennsylvania, the German and Japanese transplants to the United States have been attracted to areas where labor is skeptical of the benefits of unions. Volkswagen had moved into an area that had long mining history, and the battles between mine workers and mine operatorators make even Ford’s war with the UAW in the 1930’s look tame (and that takes something). Volkswagen stepped into a situation unlike anything they had known in Germany.
The south has done well as a result, particularly by the Germans. Honda seems to be the most northern in its orientation and the closest fit to the Cincinnati hypothesis, thought I understand Honda has facilities in Mississippi as well as Ohio. Ontario does well too, in part because of good reputation for quality work on the part of its workforce and the health insurance situation. Geography is key, but it goes past considerations of access to markets and transportation, though those are important, to cultural geography as well.
Paul,
I wonder if Honda is not sending the American South a message. The Deep South has now lost 4-5 Japanese major auto plant expansions in a row to the Midwest or Canada. This inspite of the fact that Southern Governors and legislatures through around tax breaks and public infastructure upgrades like drunken sailors making Indiana and Ohio look like absolute tight wads.
Yes the mid-west is more centrally located and has a fairly well skilled workforce to draw upon. But I can not help but think that a major issue with lots of Japanese executives and engineers is that they simply do not what to live in the increasingly narrow minded, dominionist, red-neck American south and have to raise their children there.
By any comparison Indiana and Ohio is simply not as backward as Alabama and Mississippi.
Why does Honda get to decide where they build a plant? Do all countries allow a foreign company to pick out the place they choose? But I’m also somewhat confused whether Honda is foreign or not…
I suspect they have a subsidiary, Honda of America or somesuch.
Volkswagen definitely has an American subsidiary.
llamajockey,
I certainly think that cultural aspects play a part when a foreign company looks for a location for a facility. I understand Germans have found Charleston, South Carolina has a familiar “old world” field it, and maybe they like Alabama because of all those German Rocket scientists sent to Huntsville, Alabama after World War II. A state or region can do its part in making nationals of other countries feel welcome in a number of ways and I understand that the South has worked on making Germans welcome in this way.
Its true that the Japanese haven’t put nearly as much into the south, though I thought San Antonio, Texas recently “won” a Toyota facility.
But I doubt that Honda executives are aware of sending anyone a message, nor do I think they would want to be seen as doing so. They want to sell cars to the south too. I would guess that Indiana is simply closer to its Ohio based suppliers, but moving a little more afield avoids competing with those same suppliers for labor.
Speaking generally of auto plants though, I will confess to having less enthusiasm for this sort of development than others do. As was quoted in a story in the Indianapolis Star this morning (2 July): “Often when you bring in an established concern that’s going to employ 2,000 people, you don’t get the growth possibility that you would if you put your money on a young Bill Gates who has three employees now but will have 30,000 in the future,” said Jon Teaford, professor of urban history at Purdue in West Lafayette and author of the book “Cities of the Heartland: The Rise and Fall of the Industrial Midwest.”
http://www.indystar.com/apps/pbcs.dll/article?AID=/20060702/BUSINESS/607020480
It is possible too that our long time emphases, first on agriculture, then on manufacturing, encouraged an attitude that education is not important. Our high school drop out rate has for years stood out as being much higher than the national average. See the Kids Count Data Book for 2006 at:
http://www.aecf.org/kidscount/sld/profile_results.jsp?r=16&d=1
Perhaps the recent increase in the age for dropping out from 16 to 18 will help here.
I would prefer to see a steady emphasis placed on development which centers on the many fine colleges and universities in the state. One that encourages the graduates of those schools to stay, and try their hand at any legal and productive activity that comes to mind.
Growing up in Marion I heard many of my parents’ friends, who generally ran small manufacturing concerns, talk about how when GM came to town in the 1950’s they thought it would be great, but in the long run how it proved a disaster for the community because of some of the attitudes it fostered. In part they were just griping about having to compete with Generous Motors’ wage scales, but I think too they had a point about believing that we could actually do something for ourselves.
When I took my first gainful employment in the mid 1980’s I was assigned by my employer to San Jose, California. The most shocking thing to me about California was the attitudes of my neighbors. So many of them really believed that they too could start a business and make a million, or ten. Indiana will never be a place attractive to our children until we learn something of that attitude, rather than believing that an auto assembly plant is way of the future.