Air bag maker Takata files for bankruptcy in Japan, US
- Author: Zachary Reyes Jun 26, 2017,
Jun 26, 2017, 10:51
Japanese air bag maker Takata Corp. says it had to file for bankruptcy protection in Tokyo and the U.S.to ensure it could continue supplying replacements for faulty air bag inflators linked to the deaths of at least 16 people.
The auto companies have already shifted business away from Takata and toward rivals for about 70% of the parts to fix the millions of vehicles recalled for the company's defective airbag inflators, which can explode with too much force and spray drivers and passengers with metal and plastic shards.
It is facing billions of dollars in liabilities over its defective airbags, which have been linked to at least 17 deaths worldwide.
Under the deal, Sterling Heights based-Key Safety proposed to acquire all global Takata assets and operations, except those tied to the phase-stabilized ammonium nitrate airbag inflators business. They didn't want to be identified because the bankruptcy terms haven't been made public.
Late 1990s: Takata begins making air-bag inflators with ammonium nitrate propellant.
CEO and Chairman Shigehisa Takada, the bookish grandson of the company's founder, has been criticised for his handling of the recall crisis.
"The proposed structure for the potential transaction is meant to minimise transaction risk and supply chain disruption concerns for Takata's (automaker) customers", Luo added.
But Takata's bankruptcy isn't expected to disrupt the massive recall triggered by its faulty products.
The Japan-based auto supplier has pledged to recall and replace tens of millions of defective airbag inflators used by 19 vehicle and truck makers around the world, from Tesla Inc to Toyota Motor Corp.
Almost 100 million cars, including about 70 million in the United States, were subject to the airbag recall linked to a risk they could improperly inflate and rupture, potentially firing deadly shrapnel at the occupants.
In fact, the National Highway Traffic Safety Administration lists 34 automotive brands, from Acura to Volkswagen, and vehicles from model years 2001 through 2011. Key said it wouldn't cut any Takata jobs or close any facilities.
Nissan does not disclose whether it continues to use Takata inflators but said it has established new supply lines for the component and is working with alternative suppliers to "develop new inflators for prompt rollout in future vehicles".
In the biggest bankruptcy of a Japanese manufacturer, Takata faces tens of billions of dollars in costs and liabilities resulting from nearly a decade of recalls and lawsuits.
Takata has 12 overseas subsidiaries that have also filed for bankruptcy protection.
Honda, a big Takata shareholder and formerly its biggest customer, is also unsure how Takata's bankruptcy filing will affect its 1.2 percent holding in the supplier.
"Because there is so much work to be done, there is a real concern that there won't be enough money to complete all these recalls and therefore the auto manufacturers themselves will have to pick up most of the costs".
For Key Safety, Takata's other assets, such as its seatbelt business, are of importance as the company hopes to leverage Takata's assets.
2007: Honda reports three incidents of air bags rupturing to Takata.
In February, Takata Chief Financial Officer Yoichiro Nomura appeared in federal court in Detroit on behalf of the corporation to plead guilty to wire fraud and to express the company's "deep regret".