Suzuki patriarch steps down from CEO post as mileage test storm grows

Wed Jun 8, 2016 9:35am EDT
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By Naomi Tajitsu

TOKYO (Reuters) - Suzuki Motor Corp (7269.T: Quote) patriarch Osamu Suzuki is stepping down as chief executive and the Japanese automaker promised to cut executive pay and slash 2015 bonuses after the bruising admission of major flaws in its fuel tests.

Executive Vice President Osamu Honda, who also served as chief technical officer, will retire, taking responsibility for the research and development team at the heart of the testing scandal.

The company said that board members would choose the next CEO on June 29 after its annual shareholder's meeting, and that the top executive would be selected from among the board members.

Japan's No. 4 automaker by sales said in May it had used the wrong methods to calculate mileage for models going back to 2010, widening a mileage testing storm that had already rocked smaller rival Mitsubishi Motors Corp (7211.T: Quote).

Those followed accounting scandals at Olympus Corp (7733.T: Quote) and Toshiba Corp (6502.T: Quote), prompting criticism from some investors that the Japanese government's push to introduce new corporate governance rules has failed to shake up a cozy and often secretive corporate culture.

Suzuki, who has led the company for nearly four decades, acknowledged that during the past few years it had become difficult to oversee all of the company's operations on his own.

"Upon reflection, I believe that this may have contributed to the latest incident," he told reporters on Wednesday.

Suzuki, 86, will remain as chairman, but his narrower role is a recognition of responsibility for a testing error the company previously shrugged off.   Continued...

Suzuki Motor Chairman and Chief Executive Officer Osamu Suzuki (C) bows as he leaves a news conference at the Land, Infrastructure, Transport and Tourism Ministry in Tokyo, Japan May 31, 2016. REUTERS/Issei Kato