Honda will take another $363 million charge for Takata airbag recalls

TOKYO (Reuters) — Honda Motor Co. said it would restate its financial results for the last business year, to account for $363 million in additional costs to pay for an expanded recall of cars equipped with Takata airbag parts.

Honda said in a statement it estimated additional spending of 44.8 billion yen ($363 million) after Takata, its top supplier of air bags, agreed to an expanded recall in the United States last month.

A Honda spokesman said the added quality costs had to be booked for the year that ended on March 31, rather than during the current year, due to accounting rules in the United States.

The revised earnings figures will be disclosed at the end of this month, the company said.

Honda reported in late April an operating profit of 651.7 billion yen for the year ended March, down 13 percent from the previous year.

The U.S. National Highway Traffic Safety Administration ordered Takata to declare more inflators defective last November, a directive that the Japanese supplier only complied with last month.

U.S. accounting rules would deem the extra spending for the expanded recalls as something that should have been foreseen and provisioned for during the last business year, the Honda spokesman said.

Takata is at the center of the recall of millions of vehicles equipped with potentially deadly airbag inflators, which can explode with too much force and spray metal fragments inside vehicles. Regulators have linked at least six deaths to the component, all in cars made by Honda.

Honda declined to disclose the number of vehicles involved for the estimated recall cost.

Be the first to comment

Leave a Reply

Your email address will not be published.


Time limit is exhausted. Please reload CAPTCHA.