Exclusive: Honda CEO shrugs off critics; will see through his supply reforms

Wed Feb 11, 2015 9:54pm EST
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By Norihiko Shirouzu

(Reuters) - Honda Motor CEO Takanobu Ito, under fire for how he is dismantling the traditional way the Japanese car maker sources parts and technologies, has resisted moves for his ouster and will fight on for another two-year term, according to four people with direct knowledge of the matter.

Ito took over in 2009, and for the past three years has shaken up Honda's decades-old, tightly-knit supply chain, looking to trim costs while finding more cutting-edge technologies. That's rankled long-term local suppliers, and some former Honda chiefs, and the pressure on Ito has been ratcheted higher by mass recalls over quality issues. Some retired executives maneuvered to have Ito removed.

"Honda's group suppliers were thrown into disarray by Ito's actions. The way things are going, they're soon all going to become subcontractors with no technologies of their own," said one former Honda chief.

But Ito, a former super-car engineer, is determined to see his reforms through, and told his critics as much at a recent meeting with some former Honda chiefs, said two of the knowledgeable individuals. None of the sources wanted to be named because of the sensitivity of the issue.

"Since the start of this year, we've been operating on the assumption that Ito will continue as chief executive," said a Honda divisional head, adding Ito has a "70 percent" chance of keeping his job.

"Ito is determined to keep going as CEO," said another individual, who was a senior Honda executive in the 1980s. "We're generally okay with that."

Honda spokesman Kaoru Tanaka declined to comment on Ito's position, but noted the company "procures components in the most optimal way possible, taking into consideration cost, quality and delivery. That policy remains unwavering and unchanged."


Honda Motor Co's President and Chief Executive Officer Takanobu Ito poses with the company's renewal hybrid sedan car "Legend" during an unveiling event in Tokyo in this November 10, 2014 file photo. REUTERS/Yuya Shino/Files