Honda alters results to reflect air bag recalls

TOKYO — Honda Motor Co. said on Friday it would restate its financial results for the last business year, to account for about $360 million in additional costs to pay for an expanded recall of cars equipped with air bag parts made by Takata Corp.

Japan’s third largest automaker said in a statement it estimated additional spending of ¥44.8 billion ($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 for the year ended March, down 13% from the previous year.

The US 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.

US 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 air bag inflators, which can explode with too much force and spray metal fragments inside vehicles. —