Honda said its new auto plant will take 24 months to build and begin production in 2008 of a 4-cylindar car. The model wasn't revealed.

The plant will pump $1.5 billion into the Midwestern economy, as Honda buys auto parts and other supplies.

Government will kick in at least $85.5 million in incentives to the project. That includes money for wastewater treatment and new or expanded roads.

Another $56 million will go to regional improvements including an upgrade of the I-74 interchange.

Gov. Mitch Daniels rushed back from a trade mission in Asia to welcome Honda to Indiana this morning.

“Honda is going to feel right at home in Indiana, and you are going to love Greensburg and this part of our state,” Daniels said.

The $550 million auto assembly plant will be seen as the place where Indiana’s economic comeback began, Daniels told a press conference in Greensburg.

Thousands of steps forward are needed across the state to make an economic rebound a reality. “Our state has a long way to go,” Daniels said.

The governor praised the company for being a fair negotiator.

“Honda was open, honest, fair. And they were fast,” he said.

Honda’s economic impact in Greensburg was felt before the plant announcement today.

The automaker has reserved 50 rooms at the Lee’s Inn for up to five years. Manager Kristina Trueblood knocked the daily rate from $79 a room to $20.

“Lots of business for me!” she said.

Honda executive Koichi Kondo reminded reporters at the Honda plant announcement that Sam Hornish won the Indianapolis 500 in May in a Honda-powered car.

All 33 cars had Honda engines.

It will take the power and teamwork of a racing crew to make the plant come together, the Honda executive said:

“We think we will find these same characteristics from the people of Indiana."

Honda executives said the Decatur County plant will open by fall 2008.

Honda investment and jobs outstripped estimates.

Koichi Kondo, president of American Honda Motor Co., said the plant covering 1,700 acres will cost $550 million and have 2,000 workers.

Early estimates put the cost at $440 million and 1,500 jobs.

GREENSBURG, Ind. – Honda Motor Co. confirmed this morning that it will build a $400 million assembly plant near this quiet county seat southeast of Indianapolis.

Honda representatives met with local officials and then with the media this morning to discuss the decision which will create 1,500 jobs and possibly result in hundreds more at parts suppliers that are likely to pop up within 100 miles of the plant.

Until news of the announcement began leaking out Tuesday, most analysts expected Honda to pick Ohio where it has operated plants for two decades.

Instead Indiana not only prevailed over Ohio, but also Illinois, Wisconsin and Michigan -- fellow rustbelt holdovers desperate to prod their economies.

Tonight the Decatur County zoning officials will study a request to rezone about 1,600 acres for Honda. Local officials doubt the change will meet much opposition

Indiana reaps one of the biggest economic development prizes of the year and cements its position as a leading auto supplier, considering that Toyota and Subaru built plants in the state in the last two decades.

The announcement that a $400 million auto plant will be built comes later this morning and southeastern Indiana is ready to wrap Honda in a big Hoosier hug.

There is little doubt the plant and its 1,500 jobs will be built near here.

A sign flashes "Welcome Honda" outside the Learning Center, where local officials and Honda have a press conference scheduled for 10:30 a.m. The grass is freshly mowed this morning for the important visitors.

Mayor Frank Manus this morning talked about the huge economic boost for his community - and the challenges ahead.

"The first thing we have to do is start working on the infrastructure," Manus told WTHR-TV, the Star's newsgathering partner.

"Of course, we have infrastructure in place, our wastewater treatment plant. Nevertheless there are a lot of things we have to do to get ready for it. But we are ready. I've met with engineers and with all of the people it's necessary to meet with."

Manus, smiling and upbeat, did not say Honda had chosen his community for a new plant.

The mayor said Greensburg and Decatur County officials had joined forces to persuade Honda to choose their community over sites in Ohio and Illinois.

"It's just nice that everybody is working together, and I think that's the reason that we were successful in having this meeting and making an announcement at 10:30."

Scott Corbin, a $9-an-hour parts inspector at a Greensburg company, is eager to work at Honda. The divorced father of two children says he needs weekend roofing jobs to make ends meet.

Many of the people he knows at local manufacturing plants will seek Honda jobs, Corbin said this morning as he headed to work at MCC Corp.

Gov. Mitch Daniels cut short his South Korean trade mission and flew out of Seoul on Tuesday to attend today's announcement.

The Japanese automaker announcement could launch an economic boom in the state's hard-pressed southeastern corner.

Honda's plant might double in size soon after its 2008 opening, analysts say, as the automaker pours on capacity to meet high consumer demand at a time when the Detroit automakers are cutting more than 75,000 U.S. jobs in total.

Rather than pick up autoworkers stranded by Detroit, analysts say Honda apparently chose Indiana over the Honda stronghold of Ohio in part to tap into the tens of thousands of fresh industrial recruits eager for a shot at factory work.

Greensburg is a city of 10,500, but its location on I-74 is an hour's drive either way to potential job applicants living just outside Indianapolis and Cincinnati.

Honda, which pays workers about $24 an hour at its massive 11,000-employee car complex in west-central Ohio, is thought to be reluctant to expand in Ohio and draw workers already employed by its vast network of suppliers.

By bringing high wages to a faded farming and industrial region in Indiana, Honda could assure itself of being able to hand-pick workers.

A Honda plant could lead to a regional hiring boom, crank up orders for the company's more than three dozen suppliers in the region and begin to bid up wages around Greensburg. The typical employee in the Greensburg area earns about $15 an hour, compared to the statewide average of $19 an hour.

Speculation about Honda coming to Greensburg has run high since The Indianapolis Star reported in May that the company was buying options on land at three sites near Greensburg, as well as in Ohio and Illinois.

The company acknowledged on May 17 that it was searching for a plant site in the Midwest but Tuesday declined to confirm it had chosen Greensburg.

Even so, a flurry of actions pointed to Indiana pulling off one of its biggest economic coups in almost a decade:

Koichi Kondo, president of Honda North America, is expected to make the announcement in Greensburg.

Owners of farm tracts where Honda previously had secured options to buy the land near Greensburg were invited by telephone to today's meeting with Honda officials. Landowner John Corya said he was invited and was told that Honda representatives would attend.

Honda suppliers in Indiana have been suggesting since at least Friday that Honda would choose Greensburg.

Zoning officials today are scheduled to consider a request to rezone 1,656 acres for a Honda site near Greensburg.

Analysts estimated state and local incentives for the project could total $50 million.

"It sounds like if we get it, it will be the biggest success of Mitch Daniels' tenure,'' said John Mutz, a member of the board of directors of the Indiana Economic Development Corp., the state's job-creating arm. "It's coming to an area that's been depressed economically. And it puts Indiana on the upside of the automobile industry, with a high concentration of Toyota plants and now Honda.''

Toyota's $1-billion-plus truck complex near Evansville was begun in the late 1990s. Since then, it has grown to 4,600 employees and has been the biggest industrial plum in a state hungry for factory jobs.

The Toyota plant surged in size because the automaker put in assembly lines for three key vehicles -- the Sequoia sport utility, Tundra pickup truck and Sienna minivan.

Honda hasn't disclosed the vehicle it would make at Greensburg, though industry analysts figure the plant would turn out 150,000 Civic compact cars and 50,000 Fit subcompacts a year.

Honda has acquired options to buy 1,656 acres of farmland just northwest of Greensburg. As a rule of thumb, a typical assembly plant requires 1,000 acres including land for rail facilities and a buffer zone.

The additional 656 acres Honda is seeking could be used for auto parts plants brought in by Honda to lower delivery costs in the event consumer demand for the Fit grows, analysts say.