Honda replacing CEO amid sales drop

TOKYO – Honda Motor Co. – hurt by falling sales and embroiled in a crisis over defective air bags – is replacing its CEO.

The Japanese automaker said Monday that Takanobu Ito, its president and chief executive officer since 2009, will step aside in June and be succeeded by longtime executive Takahiro Hachigo.

The unexpected decision follows the recalls of 6.2 million Honda vehicles in the U.S. – and millions of others elsewhere – equipped with air bags made by Japan’s Takata Corp. The air bags have inflators that can explode, expelling shards of metal and plastic. At least six deaths and 64 injuries have been linked to the problem worldwide.

At a news conference Monday, the 61-year-old Ito said it was his decision to step down. He has been at Honda since 1978, when he joined the company as a chassis engineer.

“I believe Honda needs to become one strong team in order to overcome challenges, and the team requires a new, youthful leadership,” Ito said, according to a transcript provided by Honda. Hachigo is 55.

Other automakers use the Takata air bags, but Honda has the most exposure and is spending heavily on the recalls. The company has lowered its full-year profit forecast to $4.6 billion from $4.8 billion.

Honda also is facing civil penalties and lawsuits over the issue. In January, the U.S. fined the company $70 million, which was the largest civil penalty levied against an automaker, for not reporting to regulators 1,729 complaints that its vehicles caused deaths and injuries and for not reporting warranty claims.