Honda Motor is about to announce plans to hire 2,000 workers and to double production of engines and mini vans at its Alabama plant, a newspaper said.

Separately, a Honda official said the company has been shipping in steel from Japan for a few weeks "as an emergency measure" because US steelmakers have been unable to supply enough of the metal to meet its needs.

The Alabama expansion plan would lift Honda's output of Odyssey minivans and V6 engines from about 150,000 a year to about 300,000.

The state of Alabama is believed to have contributed about $90m (�59m) worth of tax breaks, worker training schemes and other incentives to the project, the Birmingham News reported.

Steel imports

Such subsidy payments could be controversial, given Honda's decision to import steel from Japan.

But Honda has defended its action.

"We believe we should procure [steel] from manufacturers [in the US], and this measure does not mean we will buy steel from Japanese manufacturers permanently from now on," the spokeswoman said.

In principle, 90% of Honda's steel requirement is delivered by local manufacturers, she explained.

"The supply and demand balance has collapsed as local steelmakers went under," the spokeswoman said.

In addition, US tariffs of up to 30% on imported steel have caused a shortage of foreign steel and triggered a supply shortage of US steel, she explained.

Detroit's rival?

The state support for Honda's latest expansion totals $45,000 per new worker.

The latest cash injection will come in addition to tax breaks, land improvement grants and a worker training fund, together worth $158m when the plant was set up in 1999.

In 2001, Honda hired 800 workers and increased its Odyssey production to 150,000 a year from its original projection of 120,000.

Honda's expansion plans will further boost Alabama's role as a leading car making centre.

Currently, five major car makers employ 34,000 people in Alabama, including:

• Honda in Lincoln
• Mercedes-Benz in Vance
• Toyota in Huntsville
• Navistar in Huntsville
• Hyundai in Montgomery

Honda in Lincoln, Mercedes-Benz in Vance, Toyota in Huntsville, Navistar in Huntsville and Hyundai in Montgomery.

Workers at Honda's plant in Alabama typically earn about $22-24 an hour, though entry level jobs pay abut $14 an hour.

The average wage in the state is $13.72, according to official statistics.