Latest
Recommended
Published: Mon, June 19, 2017
Economy | By Melissa Porter

Takata would stop making air-bag inflators after bankruptcy after recall

Takata would stop making air-bag inflators after bankruptcy after recall

The Japan Times has also reported today that safety officials at Takata and Nissan will be referred to prosecutors on suspicion of professional negligence resulting in injury after a recalled airbag inflator in a Nissan vehicle ruptured in a collision in 2015.

The problem has triggered the largest recall in automotive history, impacting about 100 million airbags produced by Takata.

A key question is whether Takata can complete a Japanese bankruptcy filing before its general shareholders meeting June 27.

If the plans are approved by Takata's board, the company will include them in its bankruptcy filings with USA and Japanese courts as early as next week to help it cope with the liabilities stemming from its defective air-bag inflators, sources say.

A spokeswoman for Tokyo-based Takata said she wasn't aware of the reported plan and the company will issue a statement on it soon. The problem is now blamed for at least 16 deaths - most of those in the United States - as well as more than 180 injuries. Takata is hoping to erase billions in liabilities and resolve the recall of air-bag inflators.

Also at stake is $850 million owed by the Japanese airbag system maker to major global automakers under a settlement agreed to earlier this year. The Japanese supplier will file in the US and Japan, Reuters reported.

Reuters reports that 65 percent of the 46.2 million passenger vehicles recalled for defective Takata airbag inflators in the U.S. have not yet been repaired. Since then, Key has been working with Takata on a restructuring plan.

Takata has been working for months on a deal with Key Safety Systems, the U.S. unit of Chinese auto components supplier Ningbo Joyson Electronic.

At least 15 people have died in accidents involving faulty Takata air bag inflators in the United States, Malaysia and elsewhere. Takata says its sponsor will cover this cost, which must be taken care of by early March of next year.

Presumably, Takata will continue manufacturing airbags throughout the bankruptcy proceedings.

"Longer term, the question is whether Takata, with a new owner, can rebuild trust with automakers to build future business. Now that the company's credibility has been shot, it's possible the brand may never recover and gets back to where it once was".

Like this: