Honda incentives cover roads, utility improvements and job creation

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The state said Wednesday it would provide tax incentives and infrastructure improvements totaling an estimated $156.3 million to Honda as part of the automaker’s plan to invest at least $4.2 billion in a new battery plant to supply electric vehicles and to retrofit three of its Ohio plants.

Of the $156.3 million, $85 million will be for local water and transportation improvements, while the rest will be tax incentives over 30 years based on the approximately 2,500 jobs Honda will create in the battery factory and other factories.

Honda said Tuesday it had chosen a site near Interstate 71 and U.S. Route 35 in Fayette County for a $3.5 billion factory which will manufacture batteries for electric vehicles. It will be part of a joint venture with South Korean battery maker LG Energy Solution that will employ 2,200 people.

The automaker also plans to spend $700 million to retool three of its Ohio plants to manufacture electric vehicles and supply components for them, and the investment will create 327 factory jobs.

In comparison, the state offers incentives that are expected exceed $2 billion for Intel’s $20 billion investment in Licking County where it will build two semiconductor manufacturing plants. The project will create 3,000 jobs.

Honda has chosen a Fayette County property that will become a $3.5 billion battery factory.  The property is located just east of Destination Outlets in Jeffersonville.

JobsOhio, the state’s economic development arm, said it would also provide assistance to Project Honda, as it does for other projects that create jobs in the state. This information will be made public once final details with Honda have been finalized.

“It’s important to keep existing businesses growing like Honda in Ohio, which will come with retooling,” spokesman Matt Englehart said. “The pursuit of new opportunities, such as the joint venture between Honda and LG Energy Solution, is vital because it will bring massive investment and job creation to Fayette County while building the future of automotive manufacturing in Ohio.”

Honda declined to comment on the specific package offered by the state.

“We have had discussions with a wide range of government entities on a number of topics and it would be inappropriate at this time for us to comment on what various government entities are considering with respect to infrastructure improvements and other support. to the project,” the company said. “Honda is grateful for our 45-year-long partnership with the State of Ohio and local communities.”

Of the $85 million earmarked for infrastructure improvements, $75 million will be for water and utility improvements and the rest will be used to improve local and state roads, the state said.

Lawmakers will have to approve $80 million for utility upgrades and local roadworks; the Ohio Department of Transportation already has the $5 million it will need for state highway improvements.

The tax credits have an estimated value of $71.3 million and will need to be approved by the Ohio Tax Credit Authority at an upcoming meeting. Honda has to create the jobs to get the incentives.

The package does not include any local tax incentives.

The state has estimated that for every dollar it invests, Honda will spend $50. This is based solely on infrastructure improvements.

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@BizMarkWilliams

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