Takata files for bankruptcy, overwhelmed by air bag recalls
Business
Takata files for bankruptcy, overwhelmed by air bag recalls
Japanese air bag maker Takata Corp. filed for bankruptcy protection in Tokyo and the U.S. on Monday, saying it was the only way to ensure it could carry on supplying replacements for faulty air bag inflators linked to the death of at least 16 people. The company’s executives sought to reassure their customers, suppliers and shareholders in a news conference on Monday. With the company rapidly losing value while it struggles to reorganize its finances, filing for bankruptcy protection was the only option, Takata’s president, Shigehisa Takada, told reporters.
As a maker of safety parts for the automobile industry, our failure to maintain a stable supply would have a major impact across the industry.
Shigehisa Takada, president of Takata
Takata’s inflators can explode with too much force when they fill up an air bag, spewing out shrapnel. Apart from the fatalities, they’re responsible for at least 180 injuries, and the company is grappling with the largest automotive recall in U.S. history. Most of Takata’s assets will be bought by rival Key Safety Systems, a Chinese-owned company based in suburban Detroit, for about $1.6 billion. 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.
