Honda is Moving into Aviation

Honda Motor Corporation the producer of top-of-the line Honda wipe blade is moving into aviation and would be investing a total of $27 million in a North Carolina plant that would build engines for small business jets. The construction of the factory and headquarters of Honda Aero Inc. will soon start in Burlington, North Carolina according to Fumitaka Hasegawa, Chief Executive Officer of the unit at a press briefing yesterday. The new factory will create 70 new jobs said Mike Easley, the state's governor.

Honda will be setting aside $127 million for its aviation facilities including the $40 million needed for the construction of the North Carolina plant that would build the eight-person Honda Jet. The world's biggest engine manufacturer said that there are already more than 100 orders for their $3.65 million aircraft which will use the company's engines and at the same time compete with models from the likes of Textron Inc.'s Cessna, the largest maker of business jets.

According to Richard Aboulafia, an analyst at Teal Group in Alexandria, Virginia, who has consulted with Honda on the aircraft market, "It's going to be a slow uphill battle. They are going to get a receptive market, but will have to pay to enter it. They'll probably have to spend as much in marketing costs as they are for facilities."

Tokyo-based Honda has announced that the Burlington factory will start building the HF120 turbofan engines in 2010 with initial production of about 200 units. The engines are to be sold via a venture formed with General Electric Co. the world's largest maker of aircraft engines.

Fuel Efficiency In terms of fuel efficiency the new engines will be 50 percent more fuel-efficient than other competing turbofan models, Honda said.

Mark Wagner, program manager for the GE Honda Aero Engine venture said that the engine will also be "the lowest cost to own and operate." He also added that there is also the possibility that the price will be less than $500,000 each.

Honda will perform the final assembly in Burlington, while General Electric will take care of the repair and service under their joint venture. The partnership has already sold more than 200 engines according to GE spokesman Rick Kennedy.

The Honda Aero has been previously based in Reston, Virginia and would be moving 15 people from that location.

Honda Motor is currently Japan's second biggest automaker next to Toyota Motor Corp. But in terms of motorcycle, Honda is world's largest motorcycle manufacturer. Its US automotive headquarters is located in Torrance, California.


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