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Honda Boosts Quarterly Earnings Despite Cost of Takata Recalls

Honda ends ties with Takata in wake of airbag scandal.

by on Nov.04, 2015

Honda showed off its new fuel-cell vehicles, the Clarity, at the Tokyo Motor Show last week.

Honda quarterly earnings rose 7%, to 127.7 billion yen, or $1 billion, from a year earlier despite the hefty cost of repairing vehicles using potentially deadly Takata aibags.

The third-largest of the Japanese makers released results for the July-September period, the second in its fiscal year, a day after it announced it would no longer work with Takata, long one of its most important suppliers under the so-called keiretsu system.

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“We have become aware of evidence that suggests that Takata misrepresented and manipulated test data for certain air bag inflators,” Honda explained on Tuesday. “Honda expects its suppliers to act with integrity at all times, and we are deeply troubled by this apparent behavior by one of our suppliers.”

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Honda CEO Ousted Amidst Airbag Woes

New chief executive Hachigo facing serious challenges.

by on Feb.23, 2015

Honda CEO Takanobu Ito shakes hands withe successor, Takahiro Hachigo in Tokyo on Monday.

Honda’s ongoing airbag problem has claimed another victim. In this case, it’s President and CEO Takanobu Ito, who will step aside in April, at the end of the automaker’s fiscal year.

Honda has been forced to recall millions of vehicles around the world due to problems with faulty airbags supplied by close ally, the Japanese partsmaker Takata. But Honda has run into a number of other issues and earlier this month scaled back its earnings forecast for the rest of the year.

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Ito will be replaced by Takahiro Hachigo, currently Honda’s managing officer. During a 33-year career, Hachigo helped guide the maker’s business ventures in China, Europe and the U.S. Among other things, he led the development of the popular Honda Odyssey minivan built in one of the maker’s many American assembly plants.

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Honda Curbs Production in Face of Parts Shortages

Nissan, Toyota impacted less by dockworkers strike.

by on Feb.17, 2015

In Oregon, Local 12 Southport boat pickets: Local 12 members Leonard Nelson, John Huber, Bob Palmer & Steve Maine. Photo credit: ILWU.org

Due to a prolonged strike by dockworkers at ports on the West Coast, Honda is running short on parts it needs for plants in Ohio, Indiana and Canada. As a result, the Japanese maker is slowing down production rates at the plants in those places, the maker said.

“We are experiencing parts shortages at our auto operations in Ohio, Indiana and Canada that is impacting regular production,” Honda said in a statement.

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Operations have been curtailed at plants in Greensburg, Indiana; Allison, Ontario; and Marysville and East Liberty, Ohio. Since January, Honda has using a combination of air cargo and special truck shipments to obtain key parts. (more…)

As Honda Keeps Racking Up Recalls Will it Tarnish Maker’s Quality Reputation?

Honda logs 3 big recalls in one week – impacting 1.7 million vehicles.

by on Oct.08, 2012

The Honda CR-V -- a 2006 shown here -- has faced a number of recalls this year.

It was a busy week for Honda, the maker announcing three separate recalls impacting 1.7 million vehicles – even as federal safety regulators revealed a new investigation that could eventually lead to the recall of yet another 600,000 Honda minivans and SUVs.

The latest developments put Honda firmly on track towards repeating last year’s dubious achievement as the maker to recall the most vehicles in the U.S. market. Of a total 15.5 million vehicles recalled in 2011, 3.8 million of them carried badges for Honda or its luxury brand Acura. This past week’s recalls alone accounted for nearly 45% of last year’s total.

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Even before the latest series of recalls was announced, George Peterson, chief analyst with AutoPacific, Inc., warned that Honda “needs to be worried” about the impact the ongoing series of recalls could have on its traditional reputation for building some of the market’s highest-quality products.

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Floods Deliver a 3rd Quarter Setback for Honda

by on Feb.01, 2012

The newly-updated 2012 Honda CR-V will be critical to the maker's recovery.

Honda Motor Co. Ltd. reported a drop in revenue, operating and net income for the third fiscal quarter – largely due to flooding in Thailand and the rising value of the yen, which sharply raised the company’s overall manufacturing costs.

The Japanese automaker’s consolidated operating income for the fiscal third quarter ending December 31, 2011 dropped 64%, to 44.2 billion yen, or $578 million. Honda’s worldwide unit sales of automobiles dropped to 830,000 during the company’s fiscal third quarter, which ended on December 31, 2011.

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The third-quarter stumble was a significant disappointment for the maker, which had hoped to begin boosting production and rebuilding inventory after the setbacks that followed Japan’s devastating March 31 earthquake and tsunami.

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Honda CEO Takes “Ultimate Responsibility” For Civic’s Problems

Senior Honda executives outline plans to resolve company’s current problems.

by on Dec.02, 2011

Honda CEO Takanobu Ito with the RC-E electric racing bike during the 2011 Tokyo Motor Show.

Normally one of the darlings of the automotive world, Honda has taken a number of missteps in recent months while also being slammed by a series of challenges ranging from lopsided exchange rates to earthquakes in Japan and flooding in Thailand.

CEO Takanobu Ito is taking “ultimate responsibility” for at least one of the most serious of those problems, the controversial and frequently criticized design of the latest Honda Civic, which has been slammed by such traditionally Honda-friendly folks as Consumer Reports magazine.

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“Ultimate responsibility rests with me,” said the boyish-looking chief executive during a small media roundtable during the Tokyo Motor Show.  The need to respond to the criticism of the Civic – which is expected to result in an unusually quick update of the compact line – “also rests with me and we are working out what responses to take as quickly as possible.”

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Honda Looking For Big Comeback – But Still Facing Challenges

“It’s the worst I’ve seen,” says maker’s top U.S. executive.

by on Oct.28, 2011

This year "has been the worst I've seen," laments Honda's top U.S. executive John Mendel.

As far as John Mendel is concerned New Year’s Eve can’t come soon enough.  The top American executive at Honda says this has been the worst year the Asian automaker has experienced since it first entered the U.S. market – though with its factories now back up to full capacity Mendel believes Honda is finally back on track.

Honda has spent months struggling with shortages of most of its products — notably including the all-new Civic it launched earlier in the year, just before a devastating earthquake and tsunami struck Japan and seriously damaged that nation’s automotive infrastructure.  Production is finally back up to normal, just in time for the upcoming launch of the redesigned 2012 Honda CR-V, long the dominant model in the compact crossover segment.

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This year was “the worst I’ve seen,” said Mendel, during an interview while on the launch of the new CR-V.  “We came out strong,” at the beginning of the year, with demand the strongest it had been since the U.S. economy collapsed in 2008, “and then, boom.”

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HondaJet on Hold

Engine problems lead to 1-year delay.

by on Oct.11, 2011

The HondaJet is on hold while engineers scurry to solve a problem with its engines.

As if its problems with passenger car production and poor reviews for the latest Civic weren’t enough of a headache, Honda has been hammered again – though this time on the aircraft side of its business.

Problems with the new engine it has developed will force at least a one-year delay in the first delivery of its much-anticipated HondaJet business jet.

The problem is that ice ingested by the engine during ground simulations resulted in “very minor damage” and, perhaps worse, a slight loss in thrust, revealed Michimasa Fujino, the president of Honda Aircraft Co., during an industry conference in Las Vegas.

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The latest delay means the HondaJet won’t take the skies with its first customer until mid-2013, a delay from the planned third-quarter launch this year.  And that was a setback from earlier expectations.  Problems with suppliers shot down an earlier date of 2010.

“I regret that we have to convey this message today,” said Fujino, who noted customers had already been advised of the latest delay.  So far, Honda Aircraft has taken 100 orders.

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Second Odyssey Recall Worsens Honda Problems

Newest problem: faulty front windows.

by on Mar.29, 2011

Honda announces the second Odyssey recall in just two weeks, this one involving faulty windows.

If any automaker benefited from the crisis at Toyota, last year, it was Honda.  Data suggests it was the only manufacturer to pick up a significant number of once-loyal Toyota owners during the industry giant’s problems with unintended acceleration and other safety-related issues.

But suddenly, it seems, Honda is having a spate of quality-related setbacks of its own – which could complicate matters as the company struggles through the effects of the earthquake, tsunami and nuclear meltdown trifecta that have so far shut down its Japanese operations for nearly three weeks.

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The latest problem: the recall of 2,800 Odyssey minivans because of a defect that can result in the front windows coming off their tracks, rendering them inoperable.  It’s the second recall of the latest-generation Honda van in just two weeks, following the callback of 33,000 Odysseys due to faulty windshield wipers.

The latest numbers are small – though any safety-related issue involving family-oriented minivans can be problematic beyond the actual number of vehicles recalled.  What’s especially significant is the fact that, according to data filed with the National Highway Traffic Safety Administration, Honda had the third-highest number of vehicles involved in recalls of any automaker operating in the U.S. last year – and second-highest among Japanese — 2.4 million covered by 15 separate actions.  (Nissan had 16 separate recalls but they involved just 2.1 million vehicles.)

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Honda Facing Another Airbag Recall

Latest safety action involves new Accord Crosstour.

by on Sep.14, 2010

Honda recalls one of its newest models, the 2010 Accord Crosstour, due to airbag problems.

Honda is recalling its new 2010 Accord Crosstour model to address potential safety problems with front passenger airbags.

The news is the latest in a series of safety-related actions involving the Japanese company.  Earlier this year, the maker announced it would have to make airbag repairs on more than a million other vehicles, including some of its most popular, such as the Accord sedan and Odyssey minivan, as well as models sold under the luxury Acura brand name.

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Then, last month, Honda announced the recall of 428,000 more products, the latest in an ongoing series of service actions dealing with defective ignition switches that can permit a motorist to inadvertently shut a vehicle off and remove the key without shifting to park.

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