Honda Motor has announced plans to build a $US100 million automatic transmission plant in the city of Tallapoosa, Georgia, 40 miles west of Atlanta, as part of what the company calls "a broader North American powertrain strategy".

The plan also includes "significant investments" to add production of high precision gears at its transmission plant in Ohio, and key engine components at an engine facility in Alabama. In all, Honda will invest $270 million and create 600 jobs across three states.

"This powertrain strategy represents the continuation of Honda's 25-year commitment to localise our operations close to the customer here in the US, and creates a new level of autonomy for Honda's powertrain production in America," said American Honda Motor Co., Inc. president Koichi Kondo. "Importantly, the growing experience of Honda [workers] in America is what enables us to take this next step in powertrain production."

In Georgia, Honda will invest $100 million to construct its 13th plant in North America, a new 250,000 square foot factory that will begin assembly of automatic transmissions in autumn 2006. At full capacity, the plant will employ 400 and produce 300,000 transmissions per year. Reflecting Honda's strategy to base powertrain production near vehicle production for synchronous assembly, the plant will initially support production of Odyssey minivans and Pilot SUVs at an Alabama assembly facility 60 miles west of the Tallapoosa plant.

In Ohio, Honda will invest $100 million and add 100 new jobs to expand Honda Transmission Mfg. of America, Inc. (HTM) in a move that will result in the transfer of production of high precision gears from Japan to Ohio. As the new Georgia plant begins production, HTM will gradually shift responsibility for transmission production for the Alabama plant to the new Georgia plant and phase in the new responsibility for gear production. The expansion will increase HTM's capital investment to more than $261 million, employment to 900 and plant size from the existing 361,000 square feet to 631,000 square feet.

In Alabama, HMA will invest $70 million and add 100 new jobs to begin machining additional engine components at its existing engine plant operations. These components are currently supplied by the Anna Engine Plant in Ohio and Mohka Plant in Japan. The Anna plant began operations in 2001 and, today, has the capacity to produce 300,000 vehicles and V6 engines per year. Honda's total investment in America now exceeds $1 billion.

Honda currently has an annual production capacity of one million automatic transmissions in the US and has assembled more than nine million transmissions in America since it began production at Anna in 1989. HTM assumed responsibility for transmission production in 1996.

Honda's first US powertrain operation - the Anna plant - completed a $20 million expansion in July 2003, adding a new assembly line that further increased its flexibility to produce both four-cylinder and V6 engines. The plant now has a capacity of 1.16 million engines per year. Together, Honda's Ohio and Alabama engine plants have annual production capacity of 1.46 million engines and supply all Honda and Acura vehicles produced in North America.

Collectively, these latest investments will bring to more than $8.5 billion the amount Honda has invested in its North American production, R&D and marketing operations. Using domestic and globally-sourced parts, the automaker now has annual capacity to produce 1.4 million cars and light trucks in North America at five plants in the US, Canada and Mexico.