As the global financial storm raged last fall, Honda Motor Co. faced wrenching decisions. It chose to put plans for a new factory on ice, cancel Acura's debut in Japan, kill the NSX sports car and drop out of Formula One racing. And the company cut thousands of jobs at home and abroad.
In short, Honda returned to its roots. It trimmed extras and relied on its long-standing less-is-more corporate philosophy. By at least one measure, the pain was worth it.
Honda was one of the few automakers worldwide to eke out a profit in the past fiscal year, despite its first quarterly loss in 15 years. And the automaker is one of the few still forecasting more black ink ahead.
President Takeo Fukui called the decision to offer buyouts — extended to most of Honda's 35,600 salaried and hourly workers in North America — his toughest during the current slump.
But Fukui added that the cuts should be sufficient to keep his company profitable in the fiscal year that began April 1. Honda said last month that operating income will plunge 94.7 percent to $102.8 million.
"We have a worst scenario in place," Fukui told Automotive News. "And based on that scenario, we're thinking it won't entail any more significant cuts."
Of course, making good on that vision will be up to Takanobu Ito, Fukui's successor, who takes the wheel this month. But key elements of Honda's survival plan are already in place.