Honda CEO Apologises, Survives Shareholder Heat As Nissan Partnership Nears

Key Points

• Honda CEO Mibe apologized for record losses and restructuring costs at shareholder meeting.
• Honda is shifting focus from EVs to hybrids after costly setbacks and low US demand.
• Partnership with Nissan is progressing, potentially targeting midsize SUVs and leveraging hybrid technology.

A Difficult Meeting After Months of Criticism

Honda CEO Toshihiro Mibe has been feeling the heat lately. A handful of retired Honda execs reportedly questioned his decisions behind closed doors, especially after the company’s pricey EV gamble and its slipping grip on the Chinese market. Some even wanted him out after Honda posted its worst numbers in decades.

However, Mibe held onto the wheel as Honda’s annual shareholder showdown rolled around. He kicked things off by owning up to the rough results and offering a direct apology to investors.

“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, Reuters reports.

This apology comes after Honda logged its first annual operating loss in almost 70 years, thanks to a mountain of restructuring costs from its EV adventure and some serious heat from Chinese rivals. Despite the lingering questions about where Honda’s headed, shareholders decided to stick with Mibe, giving him and the rest of the board the green light for another lap.

Why Honda Changed Course

Honda’s financial skid mostly came from slamming the brakes on its ambitious EV plans. The company ate over $9 billion in restructuring costs after realizing that Americans weren’t exactly lining up for battery-powered Hondas like they’d hoped.

Mibe said that sticking with the original plan would have meant throwing big incentives at dealers just to get cars off the lot. Worse, it would have kept Honda’s car business bleeding red ink for years.

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Honda, Nissan And Mitsubishi Are Still Teaming Up After Failed Merger Talks
“If we had continued with the original plan, the automotive business itself would have stayed in the red for at least five years, possibly as long as seven,” Mibe explained during the meeting.

So now, Honda’s pivoting to hybrids and taking a hard look at where its money will actually pay off. It’s a move we’ve seen from plenty of other automakers lately, as the EV hype train slows down.

Nissan Partnership Nears Next Step
While much of the meeting focused on Honda’s financial recovery, Mibe also provided an update on one project that could shape the company’s future, Nikkei Asia reports.

Honda’s team-up with Nissan, which started as just a talk about splitting development bills, now looks like it’s about to get real. Mibe said the partnership is “quite far along,” and hinted that some details are almost ready to drop.

Nissan has already hinted that the joint effort could focus on bigger rides like midsize SUVs and crossovers, where building costs really start to climb. Honda’s hybrid know-how is expected to be a big piece of the puzzle, while Nissan could bring the platforms and factories for segments where Honda doesn’t have much muscle.

Neither company is saying what the first joint project will be just yet. But with Honda trying to bounce back from one of its priciest resets ever, a tighter partnership with Nissan could be the launchpad for its next big move.