Honda’s sprawling Alabama auto assembly plant generated $6.8 billion in economic activity in the state last year, underscoring the far-reaching impact of the automaker’s $2 billion facility in Talladega County.
An analysis released today outlines how Honda Manufacturing of Alabama and its Tier-1 suppliers have become an economic powerhouse, together responsible for more than 43,000 jobs and 4.4 percent of the state’s total annual output of goods and services.
Bill Taylor, president of the Economic Development Partnership of Alabama, said the impact study demonstrates that the volume of business Honda conducts in the state supports a remarkable array of jobs. The EDPA enlisted the Center for Business and Economic Research at the University of Alabama to perform the analysis.
“This extraordinary economic impact is possible only because of Honda’s success in a highly competitive, global business,” Taylor said. “This success does not happen overnight and shows how important Honda is to Alabama’s economic development.
“The company is an outstanding corporate citizen that has genuine appreciation for its Alabama workforce, which company officials are quick to credit for the company’s success,” he added.
‘POWERFUL ECONOMIC ENGINE’
The analysis yields an in-depth look at Honda’s Alabama economic impact, particularly on its backyard – Talladega, Calhoun, Etowah, St. Clair and Jefferson counties, which supply 87 percent of the plant’s workforce.
- Honda’s Alabama factory employs more than 4,500 people and had a total annual payroll exceeding $360 million in 2014. Average pay was $71,000 per employee, a figure that’s 67 percent higher than average earnings for an Alabama worker.
- Honda accounted for more than $2.5 billion in non-payroll spending in Alabama in 2014.
- Honda paid $112 million in taxes in 2014 — $62.4 million in state taxes and $49.7 in local levies.
Honda’s 27 Tier-1 suppliers located in Alabama also have a significant impact. The analysis says these suppliers combine to directly employ at least 7,600 workers with total pay of $186 million. Their impact on the Alabama economy was projected at $1.9 billion in 2014 – equal to 1 percent of state gross domestic product.
Together, the Honda assembly plant and its top suppliers had an economic impact of $8.4 billion in 2014, about 4.4 percent of Alabama GDP, according to the analysis.
“Honda has been a powerful economic engine in Alabama, creating thousands of well-paying jobs and new levels of opportunity for residents in Talladega County and across the state,” said Greg Canfield, secretary of the Alabama Department of Commerce. “
“Honda has found a home in Alabama, expanding repeatedly to boost output and add capabilities,” he added. “We’ll work hard to keep this fruitful partnership going strong.”
3.5 MILLION AND COUNTING
Honda announced plans for its Alabama assembly plant in 1999, with an initial investment set at $400 million and the workforce at 1,500. After several rounds of expansion, Honda’s investment in the 3.7 million-square-foot facility now tops $2 billion.
In 2014, Honda produced more than 360,000 vehicles and V-6 engines in Alabama – three times the plant’s original capacity. Since launching production in 2001, the automaker has produced around 3.5 million vehicles in Alabama. Its production line-up currently consists of the Odyssey minivan, the Pilot sport utility and the Acura MDX luxury SUV.
“Our achievements are only possible because of our associates and the employees at our suppliers,” said Honda Manufacturing of Alabama President Jeff Tomko. “We are excited and grateful to see that HMA’s success is having such a significant impact on the state, and that it translates into greater economic opportunity for Alabamians.”
The Honda impact study was led by Sam Addy, director of UA’s Center for Business and Economic Research.
Alabama’s auto industry has become a key driver of growth in the state. Earlier this year, another analysis pegged the economic impact of Hyundai’s Montgomery auto assembly plant at nearly $5 billion a year.