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Tuesday, March 13, 2007

International Pension Divestment In Ohio: What About Honda?

CINCINNATI (TDB) -- Japanese motor vehicle manufacturer HONDA apparently does some business in Iran through an affiliate. Two Ohio lawmakers plan to offer a bill that forbids state agencies from holding investments in companies that have dealings with terrorist states -- a designation that fits the Islamic Republic of Iran.

Is it possible the bill could do serious damage to Ohio's prospects of drawing in international corporations with far-flung affiliates and operations and units that trade around the globe? And is it possible companies that do nothing to help terrorists would get caught up in a bit of anti-Iranian legislation? For example, would the bill -- which has not yet been introduced -- risk damaging Ohio's close relationship with Honda, one of the state's corporate jewels? Would it mean that Ohio cannot invest in a major company with a major presence?

JMZ at Writes Like She Talks is following the issue. Right now, there seem to be more questions than answers. Whatever happens at the Statehouse must be sure to guarantee that it does not rip a hole in Ohio's economic development programs, or cast the state as negative on foreign investment. In a global economy, Ohio lawmakers must tread with caution.

In 2004, there was a gala that celebrated Honda's arrival and growth. Some of the details of the state's laudatory package follow:

"A recent study by Honda highlighted the economic impact of Honda in Ohio:

"Honda currently employs 16,000 Ohioans.

"Since 1979, Honda has invested $6.1 billion in its Ohio facilities.

"Honda purchases $7 billion in parts and materials from Ohio suppliers annually, $2 billion of which goes to Honda facilities in other states.

"There are 154 Honda suppliers in Ohio. There are Honda suppliers in 52 of 88 Ohio Counties

"Honda suppliers employ nearly 41,000 Ohioans."

Former Democratic Gov. Dick Celeste, who served from 1982-1990, took part in the 2004 fete, noted the importance of the economic relationship and pointed out that Ohio had invested heavily in Honda, an investment that paid off handsomely.

“Clearly, Honda has found success in Ohio and Ohio has found success in Honda. Ohio’s investments in Honda over the years have been repaid many times over.”

"Investments by the State include $27 million in direct incentives and $64.4 million in related roadwork improvements. For every dollar in direct incentives, Honda has invested $226 in its Ohio operations."

Bruce Johnson, who was economic development director under Bob Taft, also was effusive about the Tokyo-Ohio ties. His remarks:

"Honda is proof that strong relationships, targeted incentives and continual nurturing can combine to produce a significant return on investment. The presence and growth of Honda of America over the last 25 years is the perfect economic development success story, demonstrating how good things result from investing in good companies. Johnson called Honda’s decision to produce its new Acura SUV in Ohio good jobs news, pointing out that both the engine and transmission would also be produced in Ohio."

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