Honda to make small jets at North Carolina plant

By STEVE HARTSOE, Associated Press Writer

Sunday, February 11, 2007

Honda announced that it would be a building a HondaJet factory near
Greensboro, North Carolina, with deliveries expected to begin in 2010.

GREENSBORO,
N.C. -- Honda Aircraft Co. announced Friday it will enter the world of
small executive jets by building a manufacturing plant near here and
investing up to $100 million.

The project is expected to create 283 jobs with an average salary of $70,000 over the next five years,
according to Gov. Mike Easley's office. That salary is twice the average wage in the area.

The two-engine HondaJets weigh less than 10,000 pounds and generally seat five to seven passengers. The
company plans to begin delivery of the $3.65 million aircraft in three years, HondaJet CEO Michimasa Fujino said.

The jets, which still lack federal approval, have a cruising speed of 450 mph and are a bit
larger than most so-called very light jets, or VLJs, with room for up to eight people. Sales projections vary from 1,000 to several thousand, according to industry experts.

"There have been so many predictions, it's a matter of wait and see at this point," said Kathleen Vasconcelos, a spokeswoman for the Aircraft Owners and Pilots Association, which has 410,000 members representing all segments of general aviation.

Only two VLJs -- Cessna's Mustang and the Eclipse 500 -- are currently certified by the Federal
Aviation Administration, Vasconcelos said.

"They're less expensive and they can go to smaller airports and land on shorter runways," she said. "In the whole United States, there are 5,200 public use airports and many of these jets could get to more of those."

Cessna delivered its first Mustang in November and Eclipse delivered its first aircraft a month later. The Mustang sells for about $2.7 million and the Eclipse price is $1.5 million.

Aircraft industry analyst Richard Aboulafia said Honda's entry is "just another niche" in the small jet lineup, which he said was a narrow market.

"The main difference between Honda and the other VLJ wannabes is they have all the money in the world," Aboulafia said. "It's not a question of persuading investors. It's a matter of turning on the cash. It's totally in their hands."

Honda already has a corporate office at Piedmont Triad International Airport, where it will make the new
HondaJet, which it says will be faster and more fuel efficient than similar executive jets.

State incentives for Honda could total $6.68 million if the company creates the jobs it plans and keeps them for 12 years.

In October, Fujino said Honda had been working on aircraft research for 20 years. The company brought its jet project to North Carolina in 2000 to help keep it confidential.

The Piedmont Triad airport also is becoming a major distribution point, with a FedEx Corp. hub under
construction, making the area "kind of an ideal location for us," Fujino said Friday. The announcement was made in an airport hangar with a blue-and-white HondaJet as a backdrop.

Honda Aircraft's corporate headquarters was formed last year and located at the airport to oversee the production and sales of the aircraft. The company must retain its current 50 employees for 12 years as part of the incentive package.

The state Commerce Department said the project could generate $21 million in net revenue for the state during the life of the grant.

Local governments have contributed $1.4 million in incentives to help Honda lease 70 acres at the airport, with 30 more acres available for expansion. The first buildings are expected to be finished by the end of 2007.

Powered by ScribeFire.