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GREENSBURG, Ind. -- Growing up in central Indiana in the early 1980s, Peter VanBaalen remembers hearing stories of people scraping their keys into the paint of Honda vehicles.

In his hometown of Anderson, he says, General Motors Corp. was the major employer, the United Auto Workers union was "all powerful," and local folks reviled Japanese auto makers. "As my parents always said, 'Know who buttered your bread,'" Mr. VanBaalen says.

The mood has definitely changed. Now, as publisher of the Greensburg Daily News, Mr. VanBaalen has joined most others in this southeastern Indiana town in rooting for Honda Motor Co. to build an assembly plant nearby.

Residents of Greensburg, population 10,500, have sent hundreds of pictures, drawings and letters to Honda as part of a letter-writing campaign. They have invited a local Japanese businessman to educate the town on Japanese culture and customs. In late May, 200 locals donned red T-shirts and stood in the shape of Honda's logo for an aerial photograph. And near the town square, Enhanced Telecommunications Corp. has unfurled a banner outside its office proclaiming, "ETC proudly supports Honda."

Last month, Honda said it would put its next assembly plant in the Midwest, and Indiana and Ohio were the first states to confirm that the company had optioned land within their borders. Illinois has also confirmed that Honda is looking at a site in the state but won't specify the location. In a longer shot, Wisconsin belatedly joined the states vying for the plant when the Walworth County Economic Development Alliance last week said it's pitching two sites to Honda.

The factory, which will cost an estimated $400 million to build and outfit, is a welcome prospect in the Rust Belt, which has been battered by the decline of the domestic auto industry. Honda hasn't specified yet what vehicles it plans to build there, but the plant could employ as many as 1,500 workers and draw additional suppliers and related businesses to the state it calls home. None of Honda's nine U.S. sites is unionized, and this one isn't likely to be either.

Honda's Marysville, Ohio, plant, opened in 1982, was the first built by a Japanese manufacturer in the U.S. Since then, foreign makers from Japan, Europe and South Korea have built -- on their own or in alliances with domestic companies -- more than a dozen others.

Most of the plants built during the 1980s were in Midwestern towns that were close enough to the existing supply base in Detroit but far enough from unions. During the 1990s, foreign companies began moving south to tap into fresh labor markets, follow the U.S. population shift and avoid winter.

Now, with GM, Ford Motor Co. and parts supplier Delphi Corp. in the doldrums, Honda is expanding again in the Rust Belt. The region offers a ready supply of skilled but unemployed auto workers, and, according to the Federal Reserve Bank of Chicago, parts suppliers are still largely concentrated in Ohio, Indiana, Illinois and Michigan. "We certainly think the Midwest is a great place to do business," Honda spokesman Edward Miller says.

Ohio is considered a particularly strong contender for the plant because Honda has a long and successful history in the Buckeye State. The Tokyo-based company has expanded since it built its Marysville plant, and it now employs more than 16,000 people in the state. Sites near two Ohio towns -- Van Wert, population 10,700, and Jeffersonville, population 1,300 -- are believed to be serious candidates. In Van Wert, residents have written more than 300 letters of support, and Burcham's Printing donated 200 signs for downtown businesses saying: "This Business Welcomes Honda." The signs were quickly snapped up, and the Chamber of Commerce has ordered 100 more.

Jeffersonville Mayor David Krupla says his town boasted to Honda of its new, $4 million wastewater-treatment plant, which will double the town's water capacity. "Anything we could get that would help us pay the bills would be a plus," Mr. Krupla says.

The clamor in Indiana for Japanese help reflects a significant shift in attitude. In 1988, then-Lt. Gov. John Mutz lost his bid to be governor after an opposing candidate ran ads portraying him as a pawn of foreign interests. Mr. Mutz had visited Japan 13 times to woo auto suppliers and other companies, culminating in the establishment in 1987 of a Subaru plant, the state's first foreign-owned auto assembly factory, in Lafayette. "There was a clear appeal to xenophobia," Mr. Mutz says now.

Things began to change in the 1990s, when it became clearer that Indiana's ties to GM, Ford and DaimlerChrysler AG could hurt the economy as those companies lost market share to overseas rivals. In 1996, Toyota Motor Corp. established an assembly plant that makes sport-utility vehicles and pickup trucks in Princeton, Ind., contributing an estimated 23,000 jobs to the surrounding region. Today, more than 500 companies with some sort of foreign ownership -- about 200 or so of them Japanese -- operate in Indiana, says Duke Energy Corp., a Charlotte, N.C., gas and electric utility.

Still, auto-industry employment in Indiana fell 8.6% from 2001 to 2005, according to a report in May by the Chicago Fed. Indiana Gov. Mitch Daniels, a Republican, has stressed attracting foreign investment as part of his drive to raise the state's per-capita annual income, now $31,276, to meet the country's average ($34,586) by 2020.

Last summer Gov. Daniels led an 80-plus-person contingent, the state's largest ever overseas trade delegation, to the World Expo in Aichi, Japan. While there, he and other state officials met with Toyota representatives. The state's economic-development staff had heard Toyota was looking to expand in the U.S., says Nathan Feltman, executive vice president and general counsel of the Indiana Economic Development Corp., a public-private partnership.

In subsequent meetings with Toyota, the state economic-development staff touted the state's experienced work force and low workers' compensation rates and electricity costs. The lobbying paid off in March, when Toyota announced a joint agreement with Fuji Heavy Industries Ltd. to start producing about 100,000 Camry sedans a year in an unused portion of Fuji's Subaru of Indiana Automotive Inc. plant in northwestern Indiana. The expansion could employ about 1,000 people.

This week, the governor is taking a smaller contingent to Japan and South Korea. A spokeswoman for Gov. Daniels says he won't comment on the details of what the state is doing to lure Honda for fear of jeopardizing a deal. "This is pretty serious stuff for us," she says. Honda has also declined to comment on its search until a decision is made.

It's serious stuff as well for Greensburg, which sits amid pork farms and fields of corn, soybeans and wheat about 50 miles southeast of Indianapolis. Several ball-bearing and other manufacturing plants have closed, downsized or moved away in recent years. The town draws a few tourists to the aspen tree that has been mysteriously growing from its courthouse clock-tower roof since at least 1870. But Greensburg's unemployment rate has been hovering around 5% in recent months, up from as low as 1.5% in 1999.

Some in this heavily agricultural region worry about the loss of fertile fields. On the Daily News's Web site, a spirited conversation has been taking place under the headline "Honda - not welcome in my town."

Undeterred, town boosters say the area offers skilled workers who aren't unionized, plenty of cheap available land, and proximity to Interstate 74. Greensburg could also draw workers from Indianapolis; Bloomington, Ind.; and Cincinnati. "It's a town where you'd really want to raise a family," says Frank Manus, the mayor.

Standing in the Daily News parking lot surrounded by GM and Ford vehicles, Mr. VanBaalen says he could see himself capitalizing if Honda lands nearby. "I would like to be the guy to open up a Honda dealership," he says. "I would think it would do pretty well."