Honda CEO apologises for company's loss, wins investor backing at annual meeting
- Honda is seeking to recover from costly strategic missteps after posting its first annual loss in seven decades last month
TOKYO: Honda Motor Chief Executive Toshihiro Mibe secured support for his reappointment to the Japanese automaker’s board at its annual meeting on Friday after apologising to shareholders for the company’s poor financial performance.
Honda is seeking to recover from costly strategic missteps after posting its first annual loss in seven decades last month, hurt by more than $9 billion in restructuring costs for its electric-vehicle business and competition from Chinese rivals.
“I would like to express my deepest apologies to our shareholders for the significant concern and inconvenience caused by the net loss recorded in the previous fiscal year’s financial results,” Mibe told shareholders at the start of the meeting.
Aside from backing Mibe, Honda shareholders approved the company’s 10 other board nominees, including nine who were up for reappointment and one new director. The vote was in line with advice from proxy advisers Glass Lewis and ISS, which had recommended supporting all directors.
Amid an EV subsidy rollback, Honda decided on its EV-linked writedown with market share of battery-powered cars in the U.S. sharply below the company’s forecasts, meaning sales of its planned models would have required big incentives, Mibe said.
Honda posts first annual loss on $9 billion EV writedown costs
If it would have gone ahead with selling its planned EVs, “it would mean the automotive business itself staying in the red for at least five years, possibly as long as seven,” Mibe said, adding that it would have created an extremely critical situation at the company.
Resignation calls
In recent months, Mibe has drawn scorn from retired Honda executives over the mishaps, with former chief executive Nobuhiko Kawamoto visiting Tokyo headquarters in April to urge him to resign, people familiar with the matter have told Reuters.
The former executives have criticised Mibe for neglecting China, the world’s biggest auto market, and for the company’s failed bet on EVs that caused Honda’s loss and highlighted a growing dependence on its profitable motorcycle division.
Near the end of the meeting, a shareholder proposed filing a motion that called for Mibe’s dismissal, but the chief executive declined to put it to a vote, saying the issue was not on the agenda and the proposal could therefore not be considered.
Mibe said talks with Nissan Motor and Mitsubishi Motors about cooperation on next-generation vehicle technologies, ongoing since mid-2024, were at an advanced stage.
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