Honda Names Hachigo New CEO - Global Trade Magazine
  February 23rd, 2015 | Written by

Honda Names Hachigo New CEO

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Honda announced Monday that Takahiro Hachigo would take over as its CEO in June, a surprise to say the least since Hachigo, 55, was little known outside the company and several doors down from the corner office. But Hachigo is an engineer and an engineer is who you call when you need something fixed.

And Honda, a company built on quality seems in real need of a tune up, its’ reputation having taken major hits due to recalls, notably for a potentially lethal airbag, as well as a corporate culture that appears to have turned toxic.

Hachigo takes over for Takanobu Ito who ruffled more than a few feathers during his six year reign. Not only did he have to pilot the company through the global financial crisis but his demand that the company trim costs by shaking up its decades-old supply chain was met with resistance by local suppliers as well as some senior and retired company executives who had suggested his removal.

Industry observers believe that at least part of the reason for Hachigo’s ascension is that he is universally liked and respected in the company, as one Honda executive put it: “I don’t know anyone who has anything bad to say about him.”

That may be due to the fact that, since joining Honda in 1982, Hachigo has worked his way up in the meat-and-potatoes world of research and development, procurement and manufacturing. It was in those fields that Honda made its name (and money) and it’s in those fields that the company finds itself oddly vulnerable these days.

Honda has had to recall its cars using the Takata airbag which has shown it can hurl shrapnel; its’ Fit subcompact has had to be recalled several times in Japan. This has not only been an embarrassment to company but effected its bottom line with a 15 percent decrease in net income in the quarter ending on Dec. 31. What’s more, or less, Honda experienced just one percent in the U.S. over the previous year while rival Toyota was up more than six percent.

Regarding his appointment—the first time Honda has named a CEO who is a non-director—Hachigo said simply, “My job is to take the [current] strategy, and evolve it.”

Where and how that evolution takes place will determine how fit Honda will be going forward.