Airbag maker Takata files for bankruptcy in Japan
1 July, 2017
Japanese airbag maker Takata filed for bankruptcy protection in Tokyo and the US last Monday as only way to ensure it could carry on supplying replacements for faulty airbag inflators linked to the deaths of at least 16 people. It is expected to be Japan’s biggest postwar bankruptcy involving a manufacturer, Kyodo news agency noted.
Most of Takata's assets will be bought by rival Key Safety Systems, a Chinese-owned company based in suburban Detroit, for about $1.6bn (175bn yen). Takata faces billions in lawsuits and recall-related costs to its clients, including Honda, BMW, Toyota, which have been paying recall costs to date. So far 100 million inflators have been recalled worldwide including 69 million in the US, affecting 42 million vehicles. Under the agreement with Key, remnants of Takata's operations will continue to make inflators to be used as replacement parts in the recalls, which are being handled by 19 affected automakers.
At least $1bn from the sale to Key is expected to be used to satisfy Takata's settlement of criminal charges in the US for concealing problems with the inflators. Of that amount, $850m goes to automakers to help cover their costs from the recalls. Takata already has paid $125m into a fund for victims and a $25m fine to the US Justice Department.
Takata began producing airbags in 1987 and at its peak became the world's No. 2 producer of the safety product. It also produces one-third of all seatbelts used in vehicles sold globally, along with other components.