Honda Motor Co., the third largest Japanese automaker, has a new chief executive and president starting this month and the newly appointed executive has denied any strategy to assist financially its troubled airbag supplier, Takat Corp.
Honda is the largest client for Takata, the airbag supplier at the heart of an ongoing and expanding auto safety crisis. Japan’s Takata Corp., a major supplier of automotive safety parts, has been recalling since 2008 millions of vehicles equipped with defective airbag inflators across eleven automotive clients. The latest development also had US auto safety regulator NHTSA and the parts maker recall almost 34 million autos in the US, because the airbag inflators can explode with too much force, sending metal shards and other shrapnel inside the cabin at high velocity. Eight deaths have occurred in Honda vehicles and hundreds of injuries across the affected automakers.
“We have money budgeted for quality-related costs, as we did last year, and we think we can respond within this allocated amount,” commented Takahiro Hachigo, adding his company has set aside a large sum to cover the cost of repairing more than two million vehicles equipped with potentially defective airbags manufactured by Takata. Just last month Honda had to modify its operating profit for the year ended March to 606.88 billion yen ($4.92 billion) from the previous figure of 651.68 billion yen it announced back in April, as it had to address expanded recall costs.