From automobiles and motorcycles, Honda Motor Co. is moving into aviation as it invests $27 million in a North Carolina plant to build engines for small business jets.
Fumitaka Hasegawa, the chief executive officer of the unit said at a press briefing in July 17 that construction of the factory and a headquarters for Honda Aero Inc. will soon begin in Burlington, North Carolina. The unit will initially create 70 new jobs, according to Mike Easley, the governor of the state.
As the biggest engine manufacturer in the whole world, Honda now has committed $127 million for aviation facilities, which include $40 million for a Greensboro, North Carolina, plant to build the eight-person HondaJet. The Japan-based company has said that it has more than 100 orders for the $3.65 million aircraft, which will utilize the company’s engines and will rival with models from Textron Inc.’s Cessna, the largest maker of business jets.
Richard Aboulafia, an analyst at Teal Group in Alexandria, Virginia, who has consulted with Honda on the aircraft market, said that it is going to be a slow, difficult battle. According to him, the company is going to get a responsive market, but will have to pay to enter it. He also said that Honda will probably have to spend nearly the same amount in marketing costs as they are for facilities.
In 2010, the Burlington factory will commence building HF120 turbofan engines. Its initial annual production is about 200, according to Honda. Through a venture formed in 2004 with General Electric Co., the largest maker of aircraft engines in the world, the engines will be sold.
In lieu of promoting fuel efficiency, Honda said that the engine will be as much as 50 percent more fuel-efficient than it competing turbofan models.
The engine will also be “the lowest cost to own and operate” according to Mark Wagner, program manager for the GE Honda Aero Engine venture. He said the sales price might be less than $500,000 each.
Honda will perform the final assembly in Burlington, while General Electric will be held responsible for the repair and service under their joint venture. GE spokesman Rick Kennedy claimed that the partnership has sold more than 200 engines.
Been based in Reston, Virginia, the Honda Aero unit is moving 15 people from the location.
Japan’s second-biggest automaker, Honda Motor settles behind Toyota Motor Corp. It is also the world’s largest motorcycle manufacturer with U.S. automotive headquarters in Torrance, California.
All Honda products are equipped with to-of-the-line features, which include Honda suspension bushing that avoids side to side rocking, odd tire wears, and even clunking noises when going over bumps.