New Honda CEO says no plans to help air bag firm Takata fund global recalls
Honda Motor’s new chief executive says the Japanese carmaker has no plans to provide financial aid to Takata, the air bag supplier at the centre of a costly global safety recall that has dented Honda’s public image as well as its earnings.
Speaking at his first news conference since taking the helm in June, Takahiro Hachigo said on Monday that Honda had set aside enough this year to cover the cost of recalling more than 2 million cars with potentially faulty air bag parts made by Takata. The carmaker recently restated last year’s earnings to account for additional costs.
We have money budgeted for quality-related costs, as we did last year
“We have money budgeted for quality-related costs, as we did last year, and we think we can respond within this allocated amount,” Hachigo said in Tokyo. Last month Honda revised its operating profit for the year that ended in March to 606.88 billion yen (HK$38.39 billion) from the 651.68 billion yen it reported in April to account for expanded recall costs.
At 55, Hachigo, begins his stewardship of Japan’s third-biggest carmaker with a mission to restore the firm’s reputation for quality. In the Takata air bag safety scare, regulators have linked eight deaths to the component, all in cars made by Honda.
Hachigo’s predecessor, Takanobu Ito, and other executives took a pay cut in October following a fifth recall of its Fit hybrid subcompact in a year, which had quality glitches unrelated to Takata-made inflators.
In total, tens of million of cars carrying Takata-made parts have been recalled around the world by a range of carmakers. Some Takata air bag inflators have exploded with too much force, spraying shrapnel inside vehicles, regulators have found.
As Hachigo seeks to develop business, he said on Monday the company remains open to alliances with other carmakers - as long as such tie-ups are of benefit to Honda.
In one such deal the Japanese firm already has an alliance with General Motors to develop hydrogen fuel-cell technology.
Hachigo also said Honda began building cars in Africa this month by retooling part of a factory in Nigeria that previously made motorcycles. The company plans to produce 1,000 Accord sedans at the plant a year, with a view to boosting production if the local market grows.
