Monday, February 23, 2009

Car Firm CEO Waves 'goodbye'

Honda (HMC): Another car firm CEO waves 'goodbye'

Posted Feb 23rd 2009 8:00AM
by Douglas McIntyreFiled under: Toyota Motor Corp. (TM)

The Japanese appear more willing to replace car companies CEOs as profits fall due to the troubled auto market. In the U.S., none of The Big Three has replaced its chief executive since the industry crisis began.
According to The Wall Street Journal, "Honda Motor Co (NYSE: HMC) said Monday that it appointed Takanobu Ito, a senior managing director, as new president and chief executive to replace Takeo Fukui." The departing CEO will get to stay on the board of directors. Just three weeks ago, Toyota (NYSE: TM) replaced its chief executive.
The moves by the Japanese car companies may seem drastic. Both are doing well, at least compared to their U.S. counterparts. While their revenue and profits may be falling, they do not have debt or labor agreements that could drag them into bankruptcies. It is hard to blame management for the global recession.
The news has to make investors in the U.S. car companies wonder why the CEOs have hung on so long. It appears that the Japanese are ready to hold management accountable for poor results, even those not entirely under their control. Their boards may want to send the message that CEO job security is based on results, regardless of the origin of those results.
At The Big Three the people who pay the price for poor performance are the blue collar and white collar workers who are being fired by the tens of thousands. It is an odd system that punishes those who did not cause the problems and lets those who did keep their jobs.
Douglas A. McIntyre is an editor at 24/7 Wall St.

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