Incentives Soar in Bid for HondaJet Plant

Honda is nearing a decision on a place to make its first jet, and Triad officials are fighting aggressively to win the plant.

Governments in the region -- about 80 miles west of the Triangle -- are poised this week to approve $1.3 million in incentives to attract the Japanese automaker. The state could offer additional enticements to aid the effort.

Honda already has its headquarters for the airplane venture in Greensboro. Now it's considering Piedmont Triad International Airport for the factory. The project could bring $100 million in investment and create as many as 300 jobs, with average salaries topping $76,000 a year.

"I think it's probably the most important economic development issue that we've dealt with since FedEx" agreed to open a hub in 1998, said Mitchell Johnson, Greensboro's city manager. "The city and the county are ... going to try to put their best foot forward."

The Greensboro City Council this evening will consider a five-year grant to the company worth as much as $600,000. The High Point City Council will consider a five-year, $100,000 grant Thursday morning, and the Guilford County commissioners will consider a three-year, $600,000 incentive Thursday evening.

A spokeswoman for the state Commerce Department declined to say whether the state is considering any incentives. But based on the amount of investment and number of jobs, Honda could easily qualify for more than $1 million in grants from state-run programs.

The Triad has been among the hardest-hit regions in the state as textiles, furniture and other manufacturing declined. Leaders have sought to stoke the economic engine with new industries and marquee companies.

Dell is perhaps the most visible example of that effort. The computer maker in 2005 opened a factory in Winston-Salem, west of Greensboro, after state and local governments promised $280 million in tax breaks and other financial assistance.

Greensboro and Guilford County officials want the Honda factory, should it come, to do more than boost employment. They expect it to draw more development.

"Any internationally known company doing a major, exciting product draws attention," said Loren Hill, president of the High Point Economic Development Commission.

Honda officials confirmed that they are considering Greensboro, but, in a statement, said that it is one of several locations under review. Company officials did not elaborate and said that while the process continues, "it is our standard practice not to publicly discuss any details."

The plane that the company plans to make is part of a new class of lighter, more efficient jets priced as low as $1 million. Several established plane makers, including Cessna and Embraer, are getting into the market. And entrepreneurs have plans for air taxi and other services.

Some analysts say that the potential is overhyped.

It's "arguably the most overblown manufacturing market in decades," said Richard Aboulafia, an analyst with aviation research firm Teal Group in Fairfax, Va. "It's a dot-com with wings."

Even so, there is demand for Honda's product. It began selling the plane, which has a typical configuration for five passengers, on Oct. 17 and within three days had more than 100 orders. Companies are seen as likely buyers, as are groups of people who want to split costs and flying time.

It's unclear exactly how Honda sees its future in the plane business, Aboulafia said.

"It could be a serious effort to clobber this niche, or it could be a really fun branding exercise," he said. Just as automakers sponsor racing teams to boost the cool factor of their brands, Honda could be venturing into jets to add cachet to its name.

No matter where it's headed, Honda has spent a lot of time on the concept, with much of the development work done in Greensboro over the past six years. In a nod to that connection, the company in August said that it would put the headquarters of Honda Aircraft Co. there.

"We're thrilled that they're here," Johnson said. And he's hoping for more.

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HONDAJET TIMELINE

1986: Honda sends a small group of engineers to study advanced aeronautics at Mississippi State University with the goal of producing an experimental light jet. The project is called MH02.

1995: Honda ends the MH02 project, saying the goals were achieved.

1999: Honda begins working on a jet engine prototype, HF118.

2000: Honda chooses Atlantic Aero Holdings of Greensboro to help create its experimental aircraft.

DECEMBER 2003: Honda begins testing a six-passenger compact jet prototype at Piedmont Triad International Airport in Greensboro.

FEBRUARY 2004: Honda Motor and General Electric announce that they are teaming up to produce the HF118 engine for small aircraft.

JULY 2004: Honda establishes a U.S. subsidiary, Honda Aero.

SEPTEMBER 2004: To launch the HF118 turbofan engine, Honda and GE form a joint venture company, GE Honda Aero Engines.

JULY 2005: Honda debuts the HondaJet at the Experimental Aircraft Association AirVenture gathering in Wisconsin. The plane, powered by two HF118 engines, executes several flybys and a perfect landing.

AUGUST 2006: Honda announces that the headquarters of Honda Aircraft Co. will be in Greensboro.

OCTOBER 2006: Honda begins taking orders for its very light jets and expects to deliver the first jets to customers in 2010.

COMPILED BY RESEARCHER BROOKE CAIN

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