Published: Sat, June 17, 2017
IT | By Jonathon Greene

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

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

Japanese automotive safety supplier Takata Corp, which earlier this year accepted a $1-billion settlement when it pleaded guilty to fraud in USA federal court, is reportedly preparing to file for bankruptcy, according to Reuters.

Takata Corp, the 84-year-old Japanese company facing billions in liabilities stemming from its defective airbag inflators, is preparing to file for bankruptcy as early as next week sources said on Thursday. Part of the plan might be parts manufacturer Key Safety Systems, which is expected to acquire Takata's operations in the near future for an estimated 180 billion yen (approximately $1.62 billion). In total, the company must recall and replace more than 100 million airbags in countries throughout the globe and it has agreed to pay $1 billion in regulator fines and customer restitution in the US alone.

Reuters reports that 65 percent of the 46.2 million passenger vehicles recalled for defective Takata airbag inflators in the USA have not yet been repaired.

Earlier this year an American judge said the costs of replacing all of the faulty Takata inflators could be $8 billion.

Takata has not commented on its alleged plans to file for bankruptcy.

"Less than one year ago, a member of our community lost her life when the recalled airbag in her vehicle exploded like a grenade, spraying sharp, metal shrapnel at her face, neck and chest", Riverside mayor Rusty Bailey said in a news release.

Not just that these faulty airbags have been linked to at least a dozen fatal incidents and more than 100 injuries worldwide. The automotive parts supplier is facing an $850 million payment to auto makers, as part of a settlement for a U.S. Justice Department criminal probe.

A federal grand jury in January indicted three former Takata executives for criminal wrongdoing in connection with the safety defect. Takata recorded a ¥79.5 billion ($716 million) loss for the financial.

Takata airbag inflator recalls are expected to continue through at least the end of 2019.

Last month, four automakers including Toyota Motor Corp agreed to a $553 million settlement to address class-action economic loss claims covering owners of almost 16 million recalled vehicles with Takata inflators. The proceedings for filing of bankruptcy is to begin shortly in the U.S. and in Japan. "Presumably, Takata will continue manufacturing airbags throughout the bankruptcy proceedings".

Takata Corp.'s exploding airbag scandal has pushed the company to bankruptcy. "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".

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