#753 – Honda has $12 billion annual impact on Alabama’s economy

Posted on | The Agurban

This is the reason communities fight so hard to land an automotive assembly plant in their region. The economic impact
from an auto assembly plant is widespread and is especially good for rural communities which often land the suppliers to these plants.

Honda has $12 billion annual impact on Alabama’s economy
Aug 27, 2019 | William Thornton | wthornton@al.com

Honda Manufacturing of Alabama contributed more than $12 billion to Alabama’s economy in 2018, according to a new study by the Economic Development Partnership of Alabama.

And through its Lincoln plant and suppliers, the automaker is responsible for 45,647 jobs in the state, the study found.

Honda hosted an event with EDPA Tuesday at Birmingham’s Vulcan Park and Museum to announce the study, conducted by the University of Alabama’s Center for Business and Economic Research. Samuel Addy, a senior research economist and associate dean at the school, conducted the study, which he said was conservative in its approach, since it limited itself to the plant and Honda’s Tier-I supply plants (Tier Is supply directly to the automaker).

Among the study’s findings:

  • Honda contributes 5.4 percent to the state’s total gross domestic product of $221.1 billion.
  • The company has a total payroll of $590.5 million, averaging $79,202 per employee, or 75 percent more than the average Alabama worker’s earnings.
  • Accounted for more than $3.45 billion in non-payroll expenditures in Alabama.
  • Paid $202.9 million in taxes, with $113.4 million in state and $82.2 million in local taxes.

Honda directly employed more than 5,300 workers last year, with most of them concentrated in Calhoun, Etowah, Jefferson, St. Clair and Talladega counties. The plant also has 26 Tier-I suppliers, employing more than 7,300 workers.

Honda recently made its 5 millionth vehicle since coming to Alabama.
HMA Senior Vice President Mike Oatridge said the state of Alabama can also take credit for the success of Honda.

“Without people, these statistics don’t mean all that much,” he said. “We get steel from Mobile, we get seats from Boaz and Oxford. That’s what makes this economic engine work.”

This was Addy’s third study looking at Honda’s economic impact, and what surprised him the most this time was the automaker’s growth. In just four years, the plant’s economic impact has increased by more than $4 billion, he said.