Shigehisa Takada personifies all that's wrong with corporate Japan. The Takata chairman has adopted a familiar response to the deadly airbag scandal that's enveloped his 82-year-old company: duck and cover. As the costs of recalling tens of millions of airbags mount — they're likely to reach $264 million in the year ending in March — Takata has remained out of sight, leaving underlings and lawyers to face the news media and testify before the U.S. Congress.
Something extraordinary just took place within the clubby ranks of Japan Inc., however: Someone had the gumption to tell Takada the jig was up. Not just anyone, but Honda's respected CEO Takanobu Ito. In December, local press speculated that Honda, Takata's biggest customer, would provide a financial lifeline to the embattled airbag maker. Ito now says Honda intends to do no such thing: "We have no interest" in keeping Takata afloat, he told reporters last week.
While that would sound unremarkable coming from a CEO in Detroit, Ito's tough message is revolutionary for Japan. It's a promising sign that the Japanese corporate sector may finally be modernizing from within. That should both cheer Prime Minister Shinzo Abe — who has called upon Japanese companies to improve their governance — and inspire him to give his stalled "Abenomics" reform program a serious reboot.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.