Honda, Battling Global Crisis, Names Ito As CEO

Honda Motor Co said on Monday Chief Executive Officer Takeo Fukui would step down in June, to be replaced by Senior Managing Director Takanobu Ito in a widely expected move amid a global crisis in the auto industry.

Fukui, 64, will complete six years at the helm and become an executive adviser to Japan's No.2 automaker as it, like the rest of the industry, faces a frozen credit market that has sent sales skidding.

Ito, 55, is currently in charge of automobile operations, having followed a career track that many saw as leading to the top post. Like Fukui, he previously headed Honda R&D Co, the carmaker's research arm.

"Honda is at its core a fun company, where we hope customers buy cars with the same enjoyment we have in making them," Ito told a news conference. "I want to raise motivation so that we have fun again."

Among other achievements, Ito, an easy-going and outspoken engineer, is credited for developing the world's first mass-produced all-aluminium-body car, the NSX sports car, which went on sale in 1990.

He joined the automaker in 1978, coaxed by company officials who told him that someday Honda might make planes, which were Ito's passion.

Ito takes the reins from Fukui, a motor racing fan who announced in December that the firm would pull out of Formula One racing, at a critical time.

Automakers everywhere are grappling with plunging sales and Honda will be fighting an uphill battle against losses in the new business year from April, as a strong yen adds to the pain when profits are repatriated.

"It's precisely because times are so tough that I thought we should overcome these times under a young leader," said Fukui.

The Japanese currency traded around 93 per dollar on Monday. It hit a 13-year high near 87 per dollar in January.

LEGACY OF CAUTION

Thanks to its more cautious and measured business approach, Honda is still expecting to stay in the black for the year to March 31, unlike rivals Toyota Motor Corp and Nissan Motor Co.

With sales crumbling in the main markets of the United States, Europe and Japan, Fukui reluctantly pulled out of Formula One racing to channel the funds instead to the development of a new generation of cars.

No serious buyer has emerged for the team, said Fukui, adding that he wanted to avoid folding the team, which employs 500 to 600 people.

Honda Formula One team bosses turned down an offer from Bernie Ecclestone to help with a planned management buy-out, the sport's commercial supremo was quoted as saying on Sunday.

British entrepreneur Richard Branson also told BBC radio on Saturday that he loved Formula One and could step in to rescue the Honda team if certain conditions were met.

Honda Formula One finished ninth overall last season, even after Honda put up about $300 million of its own money into it.

Fukui also resisted building a car factory in Russia when most rivals took the plunge when sales there were soaring last year. Car sales in Russia have since reversed, falling by double-digits in the past few months.

Honda's shares extended losses after the news, trading down 4.9 percent, before closing down 3.8 percent at 2,160 yen.