Honda to cut 10% salary of top brass from next year

Japanese automaker Honda has decided to cut monthly remuneration of its managers by 10 per cent from January 2009 as the auto industry is reeling under pressure due to the global economic slowdown.

"Bonuses for directors, corporate auditors and operating officers will be reassessed based on the business results of the current fiscal year ending March 31, 2009. In addition, monthly remuneration of directors, corporate auditors and operating officers will be cut by 10 per cent for all directors starting January 2009," Honda said in a statement.

The abrupt change involving the global automobile industry from mid-September this year was triggered by the financial crisis, which forced all the automakers to change various plans over a very short period of time.

Honda has also revised its forecast for consolidated financial results for the fiscal year ending March 31, 2009.

According to the new forecast, the automaker expects a net sales and other operating revenue of 10,400 billion Japanese yen, a fall of 13.4 per cent from previous fiscal year.

Other major controlling measure adopted by the company include the reassessment of the priorities of all investment/development projects, new production facilities and capacity expansions.

Among other steps, the company has decided to withdraw from all Formula One activities, making 2008 the last season of participation. Besides, Honda has decided to make an additional production adjustment of 54,000 units of automobiles in Japan during the current fiscal year.

"As we face the next year, while hoping for the earliest recovery of the global economy and the market situation, Honda will develop business plans based on an assumption that the situation will worsen next year and will navigate the company through this challenge," the statement added.