Honda to expand into aircraft with North Carolina facility

Honda, expanding into aviation from automobiles, motorcycles and engines, will spend $60 million for a North Carolina headquarters for its new aircraft unit.

Honda Aircraft also will build a plane factory to begin producing its HondaJet small planes for delivery by 2010, spokesman Jeffrey Smith said Friday in Greensboro, N.C. The facilities will be at Greensboro's Piedmont Triad International Airport and employ at least 300 people.

Honda's entry into aircraft manufacturing sets up a competition with Textron's Cessna, the world's biggest business-jet maker. Tokyo-based Honda last year received more than 100 orders for its $3.65 million HondaJet.

"The $60 million amount isn't significant. That's just capital investment," said Bob Zuskin, an analyst at GRA Aviation Specialists. "The real cost is getting the plane certified for sale. That can run to $1 billion with all the certification and engineering costs."

Annual production will exceed the company's initial goal of 70 a year, said Michimasa Fujino, chief executive officer of the new unit and the HondaJet's designer. Fujino declined to give the new target for the plane, which will be powered by two Honda-designed engines mounted over the wings and carry up to eight people.

It's still not clear how big a share of the small-business-jet market Honda wants, said Richard Aboulafia, an aviation analyst with the Teal Group, who has consulted Honda on the civil-aircraft market.

"The investment amount discussed today doesn't tell us anything about their ultimate ambitions," Aboulafia said. "This could be a branding exercise, and if the costs are too great they could pull the plug."

Honda Aircraft will be housed in a 215,000-square-foot facility, including a 68,000-square-foot hangar at the Greensboro airport.

The company didn't say how much it will spend on the factory.

"We are expecting additional investment," Fujino said.

To deliver planes by 2010, the company is readying three HondaJets for test flights set for late 2008 to receive Federal Aviation Administration certification, Fujino said.

The factory will be the second in North Carolina for Honda, the world's largest maker of engines. A plant in Swepsonville makes power products including lawnmowers, snow blowers, trimmers, water pumps and tillers.