Honda Motor Co. announced plans to shutter an engine parts factory located in Mooka, Tochigi Prefecture, with the closure slated for 2025.

The company also revealed the resignation of Executive Vice President Shinji Aoyama. This followed an allegation of inappropriate conduct during a social event held outside of work hours.

Honda refrained from providing specifics regarding Aoyama's conduct. However, the company stated that CEO Toshihiro Mibe would undergo a 20% salary reduction for a period of two months, acknowledging the gravity of the situation.

Following an investigation conducted by an audit committee, which included input from external experts and the development of a disciplinary action plan, the board was prepared to decide on the disciplinary measures. However, Aoyama submitted his resignation on Monday, and the board deemed it appropriate for him to step down.

Honda expressed deep regret that a senior leader, expected to uphold human rights and compliance, was the subject of such an allegation. Aoyama had been with Honda since 1986 and held several key leadership roles, including Chief Operating Officer and head of automobile operations.

The automaker, the second-largest in Japan, indicated that it would announce a revised management structure in the near future to address the situation.