Honda makes CEO switch amid air bag furor
Honda, facing issues involving Takata air bag recalls and a diminished financial outlook, announced Monday that its president, Takanobu Ito, will step aside in April.
He will be replaced by a new president and CEO, Takahiro Hachigo, who is currently the company's managing officer.
Hachigo started in the company in 1982 in automotive research and worked his way up to senior vice president for Honda R&D Americas, a post he held from 2004 to 2006. He then took the managing officer post.
The Tokyo-based company said the official change will follow the shareholder's meeting in June.
The change comes as Honda has taken center stage in the dispute over air bags made by Japan's Takata that can hurl shrapnel that can maim or kill passengers in a crash. While Honda is one of 10 automakers involved in the case, it has had the most exposure to Takata.
Honda has joined other automakers in recalling cars with Takata air bags. About 17 million from all brands have been recalled since 2008. But the air bag issues shows no signs of going away anytime soon. On Friday, federal officials announced they will levy fines of $14,000 a day against Takata for refusing to cooperate with a probe by the National Highway Traffic Safety Administration.
Besides regulatory issues, Honda has encountered earnings challenges lately. It blamed poor sales in Japan and "quality-related expenses in North America" – an apparent reference to the air bag issue – for a 15% decrease in net income in the quarter ended Dec. 31. It lowered its forecast for the rest of the year.
Honda said it made $1.2 billion in net income for its fiscal third quarter, down from $1.4 billion in the same quarter a year ago. Instead of the $4.8 billion Honda expected to earn for the fiscal year, the company predicts it will earn $4.6 billion.
Honda's sales in the U.S. have been tepid compared to some competitors. Last year, sales in the U.S. rose 1% compared to the year before. Rival Toyota saw a 6.2% increase and the industry overall enjoyed a 5.9% boost over 2013.
The automaker also has had to recall its Fit subcompact in Japan a number of times – an embarrassment for such an important product. .