OSAKA, JapanNine of Toyo Tire & Rubber Co. Ltd.'s top executives have resigned, retired or been demoted, with a number of them returning salary or taking pay cuts in the wake of the firm's ongoing controversy surrounding non-compliant earthquake-proof seismic isolation rubber bearings sold in Japan.
Chairman Akira Nobuki and President Takuji Yamamoto announced their resignations at a June 23 news conference in Japan. Seven other corporate officers or advisers also resigned, retired or were demoted, according to a translated report released by Toyo.
Mr. Nobuki's resignation became effective July 1, and the company's report said it will require him to return 50 percent of his pay for the last 12 months of his tenure. Mr. Yamamoto will continue as president until the next emergency shareholders meeting when Toyo will appoint a new management team. He will take a 50-percent pay cut for the remainder of his tenure.
The Toyo report said the emergency shareholders meeting will be held in the fall and no later than year-end. The firm said it will look to appoint a chairman from outside the company.
Other executives affected by the shakeup include:
c Tetsuya Kuze, executive corporate officer and representative director, wa demoted to senior corporate officer effective July 1 and took a 30-percent pay cut for six months;
c Kazuyuki Ito, director and senior corporate officer, resigned both positions effective July 1 and took a 30-percent pay cut for three months. A press release said he will remain with the firm as an adviser;
c Sadao Ichihara will remain a director until the next emergency shareholders meeting and take a 30-percent pay cut for six months. The June 25 release said he will remain a senior corporate officer, group executive officer of the firm's DT Business and general manager of the firm's chemical and industrial products business unit;
c Kenji Nakakura, an adviser, resigned effective July 1, the release said, and will return 50 percent of his pay from the last six months;
c Haruhiro Shinsho, an adviser, retired effective July 1 and was to return 30 percent of his pay from the last 12 months;
c Toshiaki Okazaki, a corporate officer, retired effective July 1; and
c Gentaro Aoki, an adviser, retired effective July 1.
The Osaka-based firm said in separate reports released in April and March that 145 buildings were confirmed to have non-compliant earthquake-proof rubber shock absorbers since it began selling them in 1996. Initially the company said it supplied sub-standard products from July 2004 through February 2015.
The products were certified for quality by Japan's Ministry of Land, Infrastructure Transport and Tourism, but since were found not to have conformed to performance standards.
In its 2015 first quarter financials ending March 31, Toyo said it took a $102 million one-time extraordinary loss to cover estimated costs related to the earthquake scandal, which caused the firm to suffer a net loss of $25.7 million for the quarter.
Toyo said in its first quarter financial report the loss was considered a provision of reserve for product warranties based on an estimate for the cost of repair work and other measures related to the earthquake isolation bearings it produced and sold. The loss may be greater but it could not make a reasonable calculation.
This report appeared in Rubber & Plastics News, an Akron-based sister publication of Tire Business.