A publication of the Indiana Business Research Center at IU's Kelley School of Business
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Automobile Assembly in Indiana

The infusion of 2,000 to 4,000 manufacturing jobs at the Honda plant in Decatur County is good news for auto suppliers in Indiana and surrounding states. Certainly, the effect will be regional in scope, but only time will tell us what the true metrics will show in terms of economic impact.

Figure 1: Selected Employers with 25 Employees or More in a 30-Mile Radius from Greensburg

Figure 1

Indiana has a long history with major auto plants, the most recent of which has been Toyota Motor Manufacturing of Indiana (TMMI) in Gibson County and Subaru of Indiana Automotive (SIA) in Tippecanoe County. Gibson County has seen the most significant increase in wages between the time prior to TMMI and more recently. With a 52 percent increase in jobs and an average increase in wages of 66 percent, it isn't difficult to see what the effect can be on a county with a relatively small population base. Decatur County will see similar effects on its wages and jobs because of the small population and small workforce.

In counties such as Tippecanoe and Howard, the effects of a big assembly plant are muted by the existence of a larger economic base (see Table 1). Even though Howard County has an illustrious history in the automotive industry, it is less dependent on manufacturing than Gibson and Decatur counties. Decatur County, with the infusion of between 2,000 and 4,000 new Honda jobs, will see its proportion of jobs in manufacturing jump over 50 percent. This, of course, will be the downside when the inevitable downturns in the auto industry occur.

Table 1: Jobs and Wages in Major Auto Assembly Plant Counties

Table 1
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Carol Rogers, Executive Editor
Indiana Business Research Center, Kelley School of Business, Indiana University