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Honda's Hachigo seizes the wheel as quality crisis hits profits
At a two-day gathering for Honda's suppliers in March, Chief Executive Takahiro Hachigo sounded the alarm.
www.reuters.com
UTSUNOMIYA, Japan (Reuters) - At a two-day gathering for Honda’s suppliers in March, Chief Executive Takahiro Hachigo sounded the alarm.
At the Hotel Higashinihon in Utsunomiya, Hachigo told them the Japanese automaker was facing a crisis after a string of costly recalls and other quality blunders and it needed to plot a new course, according to two people who attended the meeting.
Since then, Hachigo has been quietly working on reforms to centralize decision-making by bringing Honda’s standalone research & development (R&D) division in-house and cutting some senior management roles, according to three Honda insiders.
Expected to be announced early next year, the reforms are meant to simplify the way Honda designs cars and put its engineering resources to more effective use at a time when it needs to develop cars for an electric age, the sources said.
“Decades ago, localization ... was the buzz word and our tech center independence was a key driver for innovation,” said a former Honda executive who now is the head of one of its suppliers. “Those days are over.”