Honda plant will drive up wages, expert predicts

September 6, 2007

Manufacturers within a half-hour's drive of Greensburg might have to boost pay for their workers by 5 percent to 10 percent to compete with the Honda Manufacturing Indiana assembly plant now under construction, said the president of a prominent company that supplies temporary workers to manufacturers and warehouses.

Gary Hentschel of Personnel Management said the 2,000 production workers Honda has begun hiring will likely be drawn primarily from manufacturers close to the city southeast of Indianapolis.

"Everyone is aware of it," Hentschel said. "They're watching very closely."

"As some of the best individuals get absorbed into that work force, other employers in that broad area will have to do a little more to attract the same quality workers they have now."

Honda announced Aug. 23 that it would begin seeking workers for the $550 million plant, which is slated to begin producing Civic compacts in fall 2008.

Honda said it would accept applications only from individuals living in 20 Indiana counties, including Hancock, Johnson, Marion and Shelby in the Indianapolis area.

Hentschel predicted some prospects would move into a friend or relative's house to become eligible for the jobs, though he declined to place a number on his hunch.

The workers will be hired so gradually that the region won't easily notice the change, he added.

An economic development official in nearby Shelbyville said he doubts manufacturers will have to increase wages in order to compete.

Dan Theobald, executive director of Shelby County Development Corp., said his discussions with fiberglass insulation maker Knauf Insulation and other local manufacturers suggests local wage levels are high enough that few workers will defect to Honda."

"I don't think it's going to be that bad," Theobald said.

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