Takahiro Hachigo

Takahiro Hachigo
Born	1959-05-19May 19, 1959 (age 67) Kanagawa Prefecture, Japan
Nationality	Japanese
Education	Musashi Institute of Technology (now Tokyo City University)
Occupation	Engineer, business executive
Company	Honda Motor Co., Ltd.
Title	President and Chief Executive Officer, Honda Motor Co., Ltd. (2015 to 2021)

Takahiro Hachigo (八郷隆弘, Hachigō Takahiro; born May 19, 1959) is a Japanese engineer and business executive who was president and chief executive officer of Honda Motor Co., Ltd. from June 2015 to March 2021. He joined the Japanese manufacturer of automobiles, motorcycles and power products as an engineer in April 1982 and spent his first two decades in vehicle body and chassis design, leading development of the first-generation Odyssey minivan for North America and the second-generation CR-V.

Hachigo later moved from engineering into management, holding posts in research and development in the United States, in purchasing in Japan, as head of the Suzuka automobile factory after the 2011 Tōhoku earthquake, and in senior roles in Europe and China. His appointment as chief executive, announced on February 23, 2015, surprised observers: he was a managing officer who had not sat on the main board, and he had never served as president of the Honda R&D subsidiary, a post that earlier company presidents had typically held before taking the top job.

As chief executive Hachigo described his agenda as "solidifying existing businesses" and "preparing for future growth". He reversed his predecessor's expansion of automobile production capacity, deciding to end car production at the Sayama plant in Japan, at Swindon in the United Kingdom and in Turkey, merged motorcycle development into the parent company's operations, cut the number of model variations, and set a target for two-thirds of the company's global car sales to be electrified by 2030. He also widened the company's partnership with General Motors, took a stake in the autonomous-vehicle developer Cruise, and announced in October 2020 that the company would leave Formula One at the end of the 2021 season.

Hachigo handed the presidency to Toshihiro Mibe on April 1, 2021, stayed on as a director, and left the board at the company's annual general meeting in June 2021.

Early life and education

Hachigo was born on May 19, 1959, and comes from Kanagawa Prefecture. He told the business daily Nikkan Kogyo Shimbun that he had enjoyed building plastic models and collecting model kits since childhood, a hobby he set aside as his work became busier.

He studied engineering at the Musashi Institute of Technology, which has since become Tokyo City University, and graduated in 1982. He joined Honda directly after graduating.

Career

Engineering career (1982 to 2006)

Hachigo joined the company in April 1982. Like his predecessor as president, Takanobu Ito, he began in automobile body design and spent his early career in research and development; the magazine President described the two men as colleagues who knew each other well from that period. Hachigo was in charge of developing the first-generation Odyssey minivan aimed at the American market, launched in 1999, and later led the project for the second-generation CR-V sport utility vehicle. Reuters described him at the time of his promotion as "a low-profile engineer with global experience" who had worked on the U.S. Odyssey and the CR-V.

In 2004 Hachigo became senior vice president of the group's North American research and development subsidiary, Honda R&D Americas, Inc. In April 2006 he returned to Japan as an operating officer of Honda R&D Co., Ltd., the group's main research and development company, and in April 2007 he was promoted to managing operating officer there.

Purchasing (2008 to 2011)

In April 2008 Hachigo moved from research into the parent company's purchasing operations as general manager of Automobile Purchasing Division II, responsible for buying parts from suppliers. Hachigo was named an operating officer of the parent company in June 2008, and in April 2010 became general manager of Purchasing Division II. The magazine President later cited his time in purchasing, alongside his factory and overseas postings, as evidence of an all-round career that went beyond engineering.

Suzuka factory (2011 to 2012)

In April 2011, weeks after the Tōhoku earthquake and tsunami of March 2011, Hachigo was appointed general manager of the Suzuka Factory in Mie Prefecture. According to Nikkan Kogyo Shimbun, he used the disruption caused by the disaster as a spur to integrate development, production and purchasing at the plant, work that contributed to the success of the N series of kei mini-vehicles. He held the post until April 2012.

Europe (2012 to 2013)

In April 2012 Hachigo was appointed vice president and director of Honda Motor Europe, Ltd., based in the United Kingdom. In September 2012 Hachigo additionally became president and director of the group's European research subsidiary in the United Kingdom and a managing officer of Honda R&D Co., Ltd.

China (2013 to 2015)

In April 2013 Hachigo moved to China as the company's representative for development, purchasing and production in the country, and as vice president of the group's Chinese holding company, Honda Motor (China) Investment Co., Ltd. In November 2013 Hachigo also became vice president of a newly established Chinese technology subsidiary. He was promoted to managing officer of the parent company in April 2014 while remaining in China. Nikkan Kogyo Shimbun wrote that in Europe and China he brought together staff from different divisions and helped lay the groundwork for the company's "six-region" global operating structure, under which each major region had its own production and development capability.

Appointment as president (2015)

On February 23, 2015, the board announced that Ito would step down as president and chief executive in June 2015, after six years in the post, and that Hachigo would succeed him. Hachigo was promoted from managing officer to senior managing officer on April 1, 2015, as a step towards the presidency, while Ito was to remain on the board as a director and adviser. Hachigo was 55 at the time.

The announcement came while the company was dealing with repeated recalls of its Fit hybrid subcompact and with multi-million-vehicle recalls to replace airbag inflators made by the supplier Takata Corporation. Reuters reported that Ito's efforts to shake up the company's supply chain had upset Japanese suppliers and that some retired executives had manoeuvred to have him removed. The analyst Takaki Nakanishi told Reuters that the choice of Hachigo looked like "an attempt by [the company] to tread a different course, with someone who upholds harmony". President noted that Hachigo had leapfrogged nine more senior executives and had not been a director of the parent company. It reported that he received the call naming him as successor while posted in China early in 2015, that he said he was "surprised, having not expected it", and that Ito told him "the preparations for a leap forward are in place". Hachigo told reporters that 2015 would be "a year when [the company] blooms", and that his role was to create challenging products and push forward the six-region structure.

Shareholders approved his election to the board at the annual general meeting in June 2015, and he took office as president, chief executive officer and representative director that month. Nikkan Kogyo Shimbun gave the date of his assumption of office as June 17, 2015.

President and chief executive officer (2015 to 2021)

In his first two years Hachigo set two themes: developing distinctive and "challenging" products and advancing the six-region global operating structure. Speaking at the company's annual Honda Meeting press event on June 8, 2017, he said the new Civic, the new CR-V and the next Accord were being strengthened as global models, alongside regional models such as the BR-V for Asia, the Ridgeline and Odyssey for North America and the Avancier and UR-V for China. At the same event he presented the company's "2030 Vision", whose statement committed the group to "serve people worldwide with the joy of expanding their life's potential", and announced the goal of electrifying two-thirds of global automobile unit sales by 2030, with a focus on hybrid and plug-in hybrid models alongside battery-electric and fuel-cell vehicles.

From 2017 onwards Hachigo's tenure was dominated by restructuring of the automobile business. In October 2017 the company announced that car production at the Sayama plant in Saitama Prefecture would be consolidated into the newer Yorii plant by around the fiscal year ending March 31, 2022. On February 19, 2019, Hachigo announced a reorganisation of the motorcycle, automobile and power-products businesses and of Honda R&D, together with the decision to begin consultation on ending car production at the Swindon plant in 2021 and to stop building the Civic sedan in Turkey the same year. In a speech on May 8, 2019, he acknowledged that "as a result of accommodating regional needs somewhat excessively in each individual region", the number of models and trim variations had grown and efficiency had declined, and he set targets for 2025 to cut trim and option variations on global models to one-third, to cut development man-hours for mass-production models by 30 percent, and to cut global production costs by 10 percent compared with 2018.

In 2018 Hachigo's company invested in GM's autonomous-driving unit Cruise, and in 2020 it agreed to develop electric vehicles with GM and signed a memorandum toward a North American alliance (see below). On October 2, 2020, Hachigo announced that the company would withdraw from Formula One as a power-unit supplier at the end of the 2021 season.

Succession (2021)

On February 19, 2021, the board decided that Hachigo would be succeeded as president and representative director by Toshihiro Mibe, then senior managing director and president of Honda R&D, with effect from April 1, 2021. Hachigo became a director without executive title from that date. The company gave the reason for the change as enabling it, "having achieved milestones in securing a business foundation geared for the future", to "evolve towards creating new value under a new management team". The same notice listed Hachigo among the directors due to retire at the June 2021 general meeting, at which the company changed its governance structure to a company with three committees. Mibe had worked with Hachigo on the structural reforms after becoming president of the R&D unit in 2019.

At a joint press conference that evening Hachigo said he had chosen the timing "because I want everyone at Honda to take on new challenges with a fresh mind" under new leadership. Mibe said he would build the company's future "on the foundation of existing businesses that Mr. Hachigo solidified". Hachigo had served as chief executive for almost six years. His name does not appear among the directors in the company's annual report filed after the June 2021 meeting, which instead lists Mibe as president and chief executive.

Leadership and management style

Hachigo presented himself as a manager shaped by the shop floor rather than by technology alone. In an interview published when he took office, he said: "I have moved through many departments, including research, purchasing and overseas. I have always worked rooted in the front line. My strength is that I can listen carefully to the voices of the front line and reflect them in management." He added that "producing results requires the manufacturing and sales front lines to argue out their views", and that his job was "to create a bottom-up environment in which the front line can work on its own initiative". Nikkan Kogyo Shimbun wrote that this willingness to listen was valued by employees and suppliers and contrasted with Ito's top-down approach.

He described the company's strength as teamwork: "When individuals overlap and a team shares a high goal and starts to move, that is when it shows its power. That is the strength of Honda that I felt on front lines around the world." Hachigo said, when asked about scale at a time when the largest carmakers were competing at around 10 million vehicles a year and his company produced roughly half that, that he would rather focus on "creating products that are distinctly Honda, offering dreams and excitement through innovative technology" than on expanding volume.

In practice Hachigo's tenure is associated with cost discipline and with breaking down barriers between the company's sales, engineering, production and purchasing functions. In his May 2019 speech he said that since becoming president he had been "increasing the efficiency and speed" of product creation by getting these functions "to collaborate beyond the boundaries of their divisions", and he introduced a company-wide development architecture to increase parts sharing across mass-production models. In fiscal 2020 the motorcycle development division of Honda R&D was integrated into the parent company to coordinate planning, development, launch and mass production more closely. Summarising his presidency in February 2021, Hachigo said that "we carried out fundamental reforms without being bound by conventional ways of doing things", pursuing "selection and concentration" of corporate resources on a global basis.

Major deals and strategic decisions

Production capacity reductions

Hachigo inherited a production network that had been built for growth. In February 2021 he said the optimisation of product development and production capacity had resulted in "some major decisions [...] such as discontinuation of production at our plants in Sayama (Japan) and in Europe", while in China, which had become the world's largest car market, production capacity "nearly doubled over the past 5 years".

• Sayama, Japan (announced October 4, 2017). The company said car production at the Sayama Automobile Plant would be consolidated into the Yorii Automobile Plant, which used newer production technology suited to electrified vehicles, with completion expected by around the fiscal year ending March 31, 2022. Sayama workers were to be transferred mainly to Yorii. The same announcement set out plans to make the automobile assembly business of Yachiyo Industry a wholly owned subsidiary.
• Swindon, United Kingdom (announced February 19, 2019). The British manufacturing subsidiary proposed closing the Swindon vehicle plant in 2021 at the end of the current model's production cycle. The plant produced 150,000 cars a year, mainly the Civic hatchback, and employed about 3,500 people. Hachigo said that in Europe "it is difficult" to build up a line-up of electrified vehicles with locally produced products, and that the next-generation Civic hatchback would be built in other regions including North America.
• Turkey (announced February 19, 2019). The Turkish subsidiary, which produced 38,000 Civic sedans a year and employed about 1,100 people, would stop making the current Civic sedan in 2021 while continuing its business operations.

At the same time Hachigo moved forward the European target for electrified sales, aiming for two-thirds of the company's car sales in Europe to be electrified by 2025, five years ahead of the global target. In May 2019 he said the capacity changes would lift global utilisation outside China from 90 percent in 2018 to full capacity by 2022.

Organisational restructuring

The February 2019 reorganisation consolidated the Motorcycle Operations and the Motorcycle R&D Center into one organisation, placed the whole automobile business under a representative director serving as chief officer of automobile operations, created separate executive posts for automobile operations and automobile sales, and renamed the power-products business "life creation" to include a new energy business. Honda R&D was split into an Innovative Research Excellence centre for advanced technology, an Automobile Center for product development, a Digital Solution Center and a Life Creation Center.

General Motors and Cruise

On October 3, 2018, during Hachigo's presidency, the company, Cruise and General Motors announced that it would work with them to fund and develop a purpose-built autonomous vehicle for Cruise. The company committed about US$2 billion over 12 years, plus a US$750 million equity investment in Cruise, for a total of US$2.75 billion; the deal valued Cruise at US$14.6 billion after the investment.

On April 3, 2020, the two carmakers agreed to jointly develop two electric vehicles for Honda on GM's global EV platform using its Ultium batteries, to be built at GM plants in North America and sold from the 2024 model year in the United States and Canada. On September 3, 2020, they signed a non-binding memorandum of understanding toward a North American alliance covering shared vehicle platforms, both electrified and internal combustion, as well as joint purchasing, research and development and connected services, with engineering work to begin in early 2021. Reuters summarised Hachigo's record as having "expanded a partnership with General Motors Co to include cooperation in developing electric and autonomous vehicles".

Withdrawal from Formula One

The company had returned to Formula One as an engine supplier in 2015, the year Hachigo became president. In his speech of October 2, 2020, he said the company had initially "experienced a number of difficulties in the areas of performance and reliability", before improving its competitiveness with partners Scuderia Toro Rosso (later AlphaTauri) from 2018 and Red Bull Racing from 2019, and winning three races in 2019 and two in the first ten rounds of 2020. He announced that the company would end its participation as a power-unit supplier at the end of the 2021 season to direct research resources toward fuel-cell, battery-electric and other carbon-free technologies, as part of a goal of carbon neutrality by 2050. At an online news conference Hachigo said the decision had been made at the end of September, that the company did not intend to return, and that "this is not a result of the coronavirus pandemic but because of our longer-term carbon-free goal".

Financial and market performance

Figures below are from the company's annual reports on Form 20-F, prepared under International Financial Reporting Standards, for fiscal years ending March 31.

Fiscal year ended	Sales revenue (¥ billion)	Operating profit (¥ billion)	Profit attributable to owners of the parent (¥ billion)	Full-time employees at year end
March 31, 2015	13,328.1	670.6	509.4	204,730
March 31, 2016	14,601.2	503.4	344.5	208,399
March 31, 2017	13,999.2	840.7	616.6	211,915
March 31, 2018	15,361.1	833.6	1,059.3	215,638
March 31, 2019	15,888.6	726.4	610.3	219,722
March 31, 2020	14,931.0	633.6	455.7	218,674
March 31, 2021	13,170.5	660.2	657.4	211,374

Sources:

Sales revenue peaked at ¥15,888.6 billion in the fiscal year ended March 31, 2019, and then fell for two years. In Hachigo's final full year, revenue fell by ¥1,760.4 billion, or 11.8 percent, to ¥13,170.5 billion, which the company attributed mainly to lower sales in all business operations, while operating profit rose slightly to ¥660.2 billion as cost reductions and lower selling, general and administrative expenses offset the fall in sales. The full-time workforce grew from 208,399 in March 2016 to 219,722 in March 2019 before falling to 211,374 in March 2021.

Remuneration

The annual reports disclosed Hachigo's individual pay, which was reported in yen as follows:

Fiscal year ended	Fixed remuneration	Bonus	Stock compensation
March 31, 2016	¥76 million	¥38 million	None reported
March 31, 2017	¥102 million	¥48 million	None reported
March 31, 2018	¥102 million	¥53 million	None reported
March 31, 2019	¥94 million	¥45 million	¥34 million
March 31, 2020	¥91 million	¥36 million	¥47 million
March 31, 2021	¥91 million	¥27 million	¥46 million

Stock compensation began after shareholders approved a board incentive plan in June 2018. Hachigo held 25,900 company shares in 2015 and 38,600 shares as disclosed in the 2020 annual report.

Board memberships and outside roles

Within the group, Hachigo served on the boards of the European regional company (vice president and director from 2012) and the British research subsidiary (president and director from 2012), and was vice president of the Chinese holding and technology companies from 2013. Hachigo was a representative director of the parent company from June 2015 to March 2021 and a director until June 2021. From April 2019 he was also the director in charge of research and development, intellectual property and standardisation.

Personal life

When Hachigo took office in 2015, he said that the car he wanted most was the Civic Type R, and that he was interested in Mazda's diesel engines.

Hachigo publicly marked motorsport results during his presidency. When the company's NSX-GT won the 2020 Super GT GT500 championship at Fuji Speedway on November 29, 2020, he issued a statement thanking the drivers Naoki Yamamoto and Tadasuke Makino, team director Kunimitsu Takahashi and the engineers who had built a car for the new technical regulations.

See also

• Honda
• Takanobu Ito
• Toshihiro Mibe
• General Motors

External links

• Honda Motor Co., Ltd. official website